The majority of the internationally branded four and five-star hotels in the Middle East hospitality market witnessed a decline across occupancy, average room rate (ADR) and RevPAR in May 2018 when compared to May 2017, professional services firm EY said in its May 2018 MENA Hotel Benchmark Survey Report.
In terms of KPIs, Abu Dhabi maintained the highest occupancy for the month of May with a 76.6 per cent occupancy rate. Saudi Arabia was the top performer across the other metrics with Jeddah recording the highest ADR of $351, resulting in the highest RevPAR of $259 in May 2018.
Due to Ramadhan beginning in mid-May this year and the onset of the summer season, the overall decline in performance in the region is unsurprising. Saudi Arabia, however, benefited from the large influx of pilgrims during the holy month. Over two million pilgrims were expected to have visited the holy city, resulting in increased KPIs across Mecca, Madina and Jeddah, with declines only in Riyadh.
Mecca saw an increase in occupancy by 7.3 per cent points to 61.2 per cent in May 2018 from 53.9 per cent in May 2017. The city’s ADR increased by 41.3 per cent from $165 to $233, which resulted in a growth in RevPAR by 60.4 per cent from $89 in May 2017 to $143 in May 2018, both of
which were the record highest increases across the region for the same period.
Madina’s occupancy increased by 4.2 per cent points from 63.8 per cent in May 2017 to 68 per cent in May 2018. It’s ADR increased by 11 per cent from $178 to $198, resulting in an increase in RevPAR by 18.3 per cent from $114 in May 2017 to $135 in May 2018.
Jeddah saw an increase in occupancy by 2.2 per cent points to 73.7 per cent in May 2018 from 71.5 per cent in May 2017. The city also enjoyed a significant growth in ADR by 19.5 per cent, up from $294 in May 2017 to $351 in May 2018. This led to an increase in RevPAR by 23.2 per cent, up from $210 in May of last year to $259 in May of this year.
In the UAE, Abu Dhabi enjoyed the highest increase in occupancy percentage points within the region with 8.9 per cent points, as well as the highest occupancy rate, which grew from 67.7 per cent in May 2017 to 76.6 per cent in May 2018. While the capital’s ADR decreased by 11.8 per cent from $101 in May 2017 to $89 in May 2018, the city maintained its RevPAR of $68 from last year.
Dubai’s hospitality market witnessed a dip across all KPIs as a result of the peak season of events and conferences coming to a close. Its occupancy declined by 16.4 per cent points from 77.3 per cent in May 2017 to 60.9 per cent in May 2018. ADR dropped by 0.7 per cent from $238 to $236, resulting in a decline in RevPAR by 21.7 per cent from $184 to $144 for the same period.
The MENA hospitality market will continue to see a drop in KPIs during the summer season as business travel declines and conferences and events are at a minimum, commented Yousef Wahbah, MENA Real Estate, Hospitality and Construction Sector Leader at EY.
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