Middle East and Africa hotel performance for July 2016
Hotels in the Middle East reported mixed results in July 2016, while hotels in Africa posted positive results in the three key performance metrics when reported in U.S. dollar constant currency, according to data from STR.
Compared with July 2015, the Middle East recorded a 4.8 per cent rise in occupancy to 58.0 per cent. However, average daily rate (ADR) was down 15.9 per cent to US$161.82, and revenue per available room (RevPAR) fell 11.9 per cent to US$93.88.
Africa experienced a 4.6 per cent increase in occupancy to 56.9 per cent, a 10.8 per cent rise in ADR to US$103.42 and a 15.9 per cent spike in RevPAR to US$58.89.
Performance of featured countries for July 2016 (local currency, year-over-year comparisons):
Kuwait recorded increases across the three key performance metrics: occupancy (+5.1% to 38.0 per cent), ADR (+0.8 per cent to KWD66.36) and RevPAR (+5.9 per cent to KWD25.21). Performance was primarily driven by a 25.9 per cent increase in occupancy in the Kuwait Area submarket. However, in the Kuwait City submarket, occupancy fell 3.8 per cent.
Qatar reported decreases in each of the three metrics. Occupancy in the country fell 6.6 per cent to 53.3 per cent; ADR was down 0.8 per cent to QAR491.68; and RevPAR dropped 7.3 per cent to QAR261.93. According to STR analysts, the month’s performance was mostly affected by an 8.0 per cent year-over-year increase in supply.
Tunisia posted a significant spike in both occupancy (+116.7% to 55.3 per cent) and RevPAR (+100.1 per cent to TND103.37), while the country’s ADR dropped 7.7 per cent to TND187.00. In the comparable month from last year, Tunisia’s occupancy level was just 25.5 per cent following the terrorist attack in Sousse the previous month. Despite the stark year-over-year percentage changes, the absolute occupancy level for July 2016 was actually the highest for any month in Tunisia since October 2014. STR analysts attribute the performance to security efforts in the country and campaigns focused on regaining tourism business. Lower rates also may have played a role in a 114.5 per cent year-over-year increase in demand.
Performance of featured markets for July 2016 (local currency, year-over-year comparisons):
Beirut, Lebanon, saw a 7.3 per cent increase in occupancy to 60.2 per cent. However, ADR was down 12.8 per cent to LBP234,510.72, and RevPAR dropped 6.4 per cent to LBP141,258.21. The absolute occupancy level was the highest for a July in Beirut since 2011. The market’s ADR, however, has decreased year over year for all seven months in 2016, due in part to a 2.9 per cent year-to-date increase in supply.
Dubai, United Arab Emirates, experienced increases in occupancy (+17.6 per cent to 67.5 per cent) and RevPAR (+7.5 per cent to AED365.08), while ADR dropped 8.6 per cent to AED540.60. The market’s demand was up 24.6 per cent year over year with a lift from Eid al-Fitr festivities. At the submarket level, the highest absolute occupancy levels were reported in Jumeirah Palm & Beaches (74.9 per cent) and the Deira & Airport Area (72.0 per cent). ADR continues to be affected by new supply (+5.9 per cent in July).
Johannesburg, South Africa, reported a 5.9 per cent decline in occupancy to 59.2 per cent, but an 8.7 per cent rise in ADR to ZAR908.85 pushed RevPAR up 2.3 per cent to ZAR537.74. The devaluation of the South African Rand has made the country an attractive tourist destination, and Johannesburg hoteliers have capitalized with increased rates, according to STR analysts. ADR has grown in year-over-year comparisons for 36 consecutive months. STR analysts cite political tensions prior to the 3 August elections as a reason behind lower occupancy for July 2016.