MENA Split Performances in 2011

End-of-year hotel results 2011 show a clear division throughout the Middle East & North Africa region, with the GCC recovering whilst the rest still struggling.

MKG - MENA 2011 Results per country

Turkey records best growth in 2011 by far, with RevPAR up by over 24%. A dynamic economy, as well as attracting most spill-over demand from unstable countries in the region; are the driving factors. Indeed, Turkey was the ideal location for Europeans and others, being closer, more stable/secure and offering value-for-money.

“Most of the GCC (excluding Bahrain of course, which has had its fair share of internal unrest) is clearly on the upturn, generally performing well and ending the year on a good note. No doubt, the GCC has benefited from the return of business and MICE tourism, intra-regional travel, as well as the consolidation in the supply boom,” states Director of Development, MKG Hospitality, Vanguelis Panayotis.

According to MKG Hospitality’s database, Kuwait proved to be the most resilient and consistent performer in the GCC during 2011, and the outright second-best performer in the entire forecasted area, ending the year with 8% RevPAR growth. This was driven by an increase in demand and a healthy business segment. The UAE showed a good rebound with 7.3% RevPAR growth. This was fuelled by results in Dubai, which managed to capture their in season MICE tourism segments, as well as a good amount of leisure. The Kingdom of Saudi Arabia (KSA) also ends the year as one of the better performing markets, with a 7% increase in RevPAR, posting balanced OR and ADR growth; key business hubs Riyadh and Jeddah driving most growth. Meanwhile, Oman and Qatar manage to stabilise.

“These better results in demand are a good sign that the hotel cycle is turning for the better. However, there are also fears that 2012 will be an uphill battle, prone to the global economic slowdown, especially in key source markets Europe and North America,” adds Panayotis. In the rest of the region, namely North Africa and the Levant, negative results were to be expected for most – and assured – due to the geopolitical situation in the region. Bahrain and Egypt are the two worst-off locations, with RevPAR declining by over 52% and almost 50%, respectively. Small signs of hope are appearing in some markets, such as Morocco, with the decline in RevPAR slowing down and demand almost stabilising. Algeria, Lebanon and Jordan all see better results in demand for the month of December; perhaps a sign that the cycle is also starting to turn here.

“Even if stability in the region returns, and manages to convince traveller’s conscious, tourism and hoteliers are unlikely to enjoy full-fledge recovery. It will however be interesting to see if ultra low packaged rates convince many to use this as an excuse for a cheaper holiday, and even more interesting to see just how 2012 results compare to the severely depressed figures in 2011,” concludes Panayotis.

MKG_PR_MENA_2011_Results.pdf (911 kb)