Hotel Online  Special Report
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Middle East Hotel Industry Continues With
More than Satisfactory Results

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Nicosia, August 26th 2005
  • Comparing the results of the two rolling 12-month periods; 2003-2004 and 2004-2005: + 17.8% RevPAR
  • The increase of 13% in Average Room Rate, combined with the 2-point increase in Occupancy Rate, reflect the big picture within important markets in the Middle East area.
  • Countries like Jordan, Oman, Qatar and UAE all recorded a remarkable rate of growth in RevPAR of no less than 45%, with Qatar reaching the highest increase of 65%. The Lebanese market though stands out from all the countries studied with a drop of 17.2% in RevPAR. Excluding Lebanon from the calculation, the RevPAR increase in the Middle Eastern countries would stand at 20.8% between the two periods.
The sample of hotels which is studied by MKG Worldwide in the Middle East region includes properties in the following countries: Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, United Arab Emirates (UAE) and Yemen. All the analysis is done by comparing two rolling 12-month periods 2003-2004 and 2004-2005, each beginning from July until the following June.

The overall Occupancy Rate figure in the Middle East for the 2004-2005 rolling period was 68.4%, registering an increase of 2.7 points when compared to the previous period’s figures. Some markets, though, record a drop in their OR with Lebanon being at the top of the list with a decrease of 11.4 points. When comparing the two periods, the OR for two other countries is down: In Kuwait the OR is down 1.9 points and in the UAE there is a fall of 2.1 points. However, these slightly declining rates are not at all linked with a decreasing demand: they are due to the additional supply entering the market during the period and also partly impacted by the already very high occupancy levels, synonyms to a saturation of supply leading to the impossibility to further increase the OR, or even to maintain them at such a high level (over 85% for Kuwait, almost 80% for the UAE). 

The two markets that reported the most increase in OR are Jordan and Oman. The first indicates a 17.5 point increase in OR, while the second a 13.9 point increase. Even if these two countries now report a good level of OR, the fact is that they barely manage to reach the current average level of the regional market, mainly due to low occupancy rates registered in 2003-2004. Unlike the rest of the countries examined, the OR for Saudi Arabia registers no change in 2004-2005 compared to the previous period.

With an overall Occupancy level increasing by 2.7 points and the Average Room Rate for the region up by 13%, the overall revenue per available room (RevPAR) for the rolling 12-month period 2004-2005 for the countries studied in the Middle East region gained 17.8% compared to the previous period. Apart from Saudi Arabia and Lebanon, all other markets in the region have each recorded a substantial increase. Countries like Jordan, Oman, Qatar and the UAE recorded an increase in RevPAR going beyond 40%. Similarly, Kuwait and Bahrain both recorded an increase in their RevPAR averaging between 14% and 25%. 

While the RevPAR in Saudi Arabia remained at the same level as the previous period, RevPAR in Lebanon dropped by 17.2%. This fall is mainly due to the 11.4-point loss in the country’s OR. The Lebanese market has been seriously affected by the latest political turbulence that the country has seen. Months after the incidents, the country’s tourist arrivals continue to be low in numbers compared to previous years. The low hotel occupancy levels show the direct impact of these events. Even though the overall OR for the Middle East region went up by 2.7 points, OR for Lebanon was down from 71.5% to 60.1%.

Qatar is a country that not only managed to keep its high levels of OR during the period 2004-2005, but also had an increase compared to the previous year. The country’s tourism is absolutely booming with an OR over 80% for the 2004-2005 period and at the same time recording the highest increase in RevPAR among the rest of the countries in the region.

Monthly overall figures for the Middle East Hotel Market
Corporate hotel chain results in the Middle Eastern Countries 
Total over 12 months rolling, as of end of June 2005


Source: MKG Database – official supplier of chain hotel statistics – August 2005

October 2004 is the only month during the rolling 12-month period 2004-2005 
that recorded an occupancy level lower than in 2003.


Source: MKG Database – official supplier of chain hotel statistics – August 2005
RevPAR figures in current US Dollars incl. tax using the exchange rate as of June 2005

While the overall RevPAR increase between the two rolling 12-month periods stands at 17.8%, the month of January 2005 shows the best performance, compared to the rest of the months, with an impressive 32% increase. March 2005 shows the second highest increase of RevPAR: +31%.

 Methodology

MKG Worldwide is the leader in Hotel, Tourism and Catering consulting, and has the largest database in the world, outside the USA, with a good representation of all hotel segments. The database of MKG contains a sample of 10,000 corporate chain hotels, representing 1,000,000 rooms. 

Since September 2004, the MKG Database offers a programme that allows the daily monitoring of hotel indicators for each hotel of a sample that in July 2005 already included 1,000 hotels. 

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Contact:

Georges Panayotis
+33 (0)1 56 56 87 90
georges.panayotis@mkg-consulting.com
www.mkg-worldwide.com

Central and Eastern Europe / Middle East
Vanguelis Panayotis
3 Nikis Av., Xenos Tower, Office 201
1086, Nicosia – CYPRUS
Phone: + 357 22 44 23 21
v.panayotis@mkg-ww.com
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Also See: France Hotel Supply Drops Slightly for Second Consecutive Year; The Market Share of Corporate Hotel Brands Gaining on Independent Hotels Supply / March 2005
2004 European Ranking of Hotel Groups; Best Western Holds Top Position of 25 Brands in Europe / MKG Consulting / February 2004
With a RevPAR Increase of 7.4%, Austria Was an Island of Prosperity in the European Hotel Landscape in 2003; Chain Hotel Results in Europe - YTD December 2003 / February 2004


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