BAHRAIN, Iran - May 10, 2000 -- Results from the recently released annual Arthur Andersen Hotel Industry Benchmark Survey indicate that the quick recovery from the economic downturn in early 1999 has brought most markets back to performance levels similar to 1998. The outlook for 2000 will be determined by the significant new supply in many destinations.  

Of the 18 cities reviewed in the survey, only five saw a decline in rooms yield of more than 5% when measured in US dollars. All markets in Egypt report significant growth rates, in particular in the tourist resorts, which have now fully recuperated from the downturn in recent years. Outside Egypt, only Riyadh and Casablanca demonstrate rooms yield growth in excess of 5% whilst the remaining destinations managed to recover from a weak start to end the year more or less on par with 1998.

The Jumeirah Beach hotels have overtaken Beirut in leading the field in terms of yield (reported in US dollars) largely due to a drop in room occupancy in Beirut for the first time since the launch of the survey in 1996. Kuwait is still the most expensive destination in the Middle East, recording an average room rate of US$166 in 1999, albeit at only 45% room occupancy. 

Although achieving occupancy levels in the high seventies, the Egyptian resort destinations remain inexpensive in comparison with other Middle East destinations, with Sharm el-Sheikh achieving an average room rate of US$52 whilst Hurghada and other Red Sea resorts record around US$32 per occupied room.  

As compared to 1998, 14 destinations in the survey reported an increase in room occupancy versus seven destinations showing a decline. Luxor witnessed the greatest improvement, with occupancy increasing by 98% to reach 53%. Occupancy in Hurghada, the Red Sea Resorts and the Cairo Pyramids also improved significantly, growing by 62%, 73% and 59% respectively. 

Hotels in Heliopolis (Cairo) recorded the highest occupancy level at 82%, closely followed by the Jumeirah Beach hotels in Dubai at 80%. Sharm el-Sheikh, Hurghada and the Red Sea resorts all achieved occupancy levels greater than 76%, demonstrating the renewed confidence of tourists in these popular destinations. The lowest occupancy levels were recorded by hotels in Kuwait, Damascus, Mecca / Medina and provincial Saudi Arabia, where occupancy levels of 45% or less were experienced.  Of specific interest is the increasing disparity between Dubai�s city hotels and the Jumeirah Beach resorts. Driven by the development of luxury resorts within the city�s reach, the Jumeirah Beach resorts achieved a 15% higher room occupancy at a surplus US$34 average rate in comparison to the city hotels, resulting in more than 60% higher rooms yield.

Comments Mohammad Dahmash, head of hospitality and real estate consulting, Arthur Andersen, Middle East, �As the markets in the Middle East mature and continue witnessing additional supply, the need for product diversification will become more important. The creation of destination resorts, niche marketing concepts, provision of in-room technology and emergence of eco-tourism will strengthen the appeal of the Middle East to international tourist and commercial markets.�

Cities covered in the Middle East and North Africa survey include Abu Dhabi, Alexandria, Amman, Beirut, Cairo, Casablanca, Damascus, Doha, Dubai, Hurghada, Jeddah, Kuwait City, Luxor, Manama, Mecca/Medina, Muscat, Riyadh and Sharm el-Sheikh. Regional samples include the Red Sea resorts, Regional UAE and Provincial Saudi Arabia. The city markets in Dubai and Cairo are broken down into sub-markets for enhanced analysis.  

Launched in 1996 as a source of hotel performance data outside North America, the Arthur Andersen Hotel Industry Benchmark Survey comprises information gathered from more than 3,500 hotels in 200 markets in 140 countries.