Tourism industry in Arab world represents US $60B to economies

According to the Deloitte & Touche HotelBenchmark Survey (HBS), the travel and tourism industry in the Arab region represents an annual economy valued at more than US $60 billion, making it the largest sector after oil.

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By  Massoud Derhally Published  March 6, 2003

Crisis in the Middle East? ‘What crisis?’ says the Deloitte & Touche HotelBenchmark Survey (HBS), which monitors key performance indicators of 6,000 hotels in more than 300 markets. According to the survey’s latest data, the travel and tourism industry in the Arab region represents an annual economy valued at more than US $60 billion, making it the largest sector after oil.

The Middle East region, according to the World Tourism Organization (WTO) will generate more than 60 million travellers by the year 2020, a significant increase, says HBS, from the 2002 level of 20 million travellers who spent over US $29 billion.

Despite rising tension and travel advisories issued by the U.S. Department of State for Iraq, Bahrain, Qatar, Saudi Arabia, Syria, Lebanon, Jordan, Kuwait and Yemen, the HotelBenchmark Survey says that in January 2003, several Middle East destinations achieved excellent levels of demand.

Hotels at Cairo Heliopolis, Kuwait, Qatar, Dubai and in the regional UAE all achieved occupancies in excess of 75%. “There were only a few locations where demand was lower than last year — only in Manama, Alexandria and Abu Dhabi were occupancies significantly below those of 2002,” says the survey.

“Generally speaking, average rates grew in January 2003 compared to January 2002 — by almost 50% in Hurghada, by more than 40% at the Egyptian Red Sea Resorts and by more than 35% at Jumeirah Beach,” added the survey.

At two Egyptian locations, revPAR (revenue per available room), doubled over 2002 levels – Cairo Pyramids, and the Red Sea Resorts of Safaga, El Gouna and El Quseir – and double-digit growth in revPAR was the norm.

There is however, a mixed bag of results. “Notwithstanding this growth, revPAR levels in several destinations remain very low - the Red Sea Resorts only achieved $15, Hurghada $16 and Luxor and Alexandria only $18. Compare this with revPAR of $167 achieved by the hotels at Jumeirah Beach and $147 in Kuwait,” said the survey.

“So far so good...but if we look at how the region’s hotels traded in January 2003 compared to January 2001 the changes are in some cases startling,” says the survey. While some hotels have recorded revPAR declines of up to 40% in the North Africa region there are cities in the region growing revPAR significantly during 2003 compared to 2001. According to the survey, “Kuwaiti hotels are generating almost 50% more revPAR this year than two years ago, Doha hotels are up almost 40% and Riyadh is up almost 30%.”

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