Regional hotel industry suffers in first half

With the exceptions of Kuwait and Doha, the hotel industry had a weak first half, but the outlook for July-December is much better.

  • E-Mail
By  David Ingham Published  August 28, 2003

The regional hotel industry’s performance in the first half of 2003 was described as “dismal” by Deloitte & Touche LLP, the UK-based professional services firm. According to its influential ‘HotelBenchmark Survey’, which tracks around 400 ‘quality’ properties across the Middle East and North Africa, hotel occupancy was 54% in the first half, a drop of 8% year on year.

There were, of course, some huge variations between the different parts of the Arab world, with Kuwait’s occupancy rate in the mid eighties and Damascus’s in the low thirties. The overall trend, however was clearly downwards, with Kuwait and Doha the only cities to see a year on year increase in occupancy rates.

The drop in business was reflected in reduced revPAR (revenue per available room) at most destinations. Kuwait and Doha were again the obvious exceptions, with both cities seeing year on year increases in both revPAR and average room rates.

Dubai’s average occupancy rate dropped in the first half, although it was still strong at 74.5% overall. A closer look at the survey showed that occupancy and revPAR at central hotels, used more by business travellers, were almost unchanged, but occupancy and revPAR at the tourist hotels on the Jumeirah Beach coastal strip both fell.

Deloitte & Touche points out that though the numbers look bad, they reflect the dire situation in the first quarter of the year. Now that war and SARS fears have abated, the industry should perform much better in the second half.

“The markets have started recovering since June and we believe that the year end results should be significantly better than the half yearly performance,” says Nader Srouji, partner in charge for management solutions at Deloitte & Touche Middle East.

“The region’s governments are aggressively promoting the tourism sector and this should pay dividends in the years to come. Much will depend, however, on the economic conditions in Europe and North America and the impact of any further global crises, coupled with the improvement in the political climate and prospects in the Middle East.”

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code