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Analysis

April 2013 : contrasting results in Africa and the Middle East

According to figures released by MKG Hospitality, the general trend in the month of April is the downturn in the hotel industry in the Middle East and North Africa. However, the evolution of the results is more mixed across regions. While most countries of the Arabian Peninsula were able to keep their occupancy rates at high levels, the Levant (Jordan, Lebanon and Turkey) does not follow the same pattern of evolution, with the exception of Turkey. Disparities are also strong in North Africa, as some countries struggling to regain their hotel activity levels before the crisis of the Arab Spring while others increased growth in tourism.

Most countries of the Arabian Peninsula are on a positive trend. Even Kuwait hoteliers, which had posted a loss of 5.2% RevPAR in March, enjoyed a positive change in their indicators in April. The United Arab Emirates, meanwhile, continue on a rising curve, even if the change in Revenue per available room (RevPAR) is not as great as that recorded in March. It is up 12.6% since the beginning of the year, the extremely high average price in the country not having any impact on occupancy rates. Abu Dhabi is the main engine of growth in the region, closely followed by Dubai, thanks to a dynamic international clientele.

The situation is more mixed in North Africa, the best student being Algeria. Hoteliers in the country are enjoying double-digit growth (+12.2%) over the month of April, due in particular to the good results of recently opened hotels such as the Novotel and Ibis establishments in Constantine which have been in operation since April 2012. For the efforts made by the country to develop its tourism, including business activity, Accor plans to develop an additional similar 240-room combo by summer 2013.

Tunisia and Morocco are showing a drop in revenue per available room. If the Accor hotels in the countries have taken the show, with occupancy rates exceeding 75%, Mary Sebastian, Director of Accor Operations Algeria -Tunisia, attributes performance "to several specific events" and anticipates more mixed results for the months to come: "May, with (too) many bridges showed a downturn in activity. Note that the business segment accounts for over 95% of our business, leisure having grazed the void due to the lack of open skies that prevented our major supply markets from coming in for the weekend. We already know that July and August will have low occupancy due to the implementation of the single session in many societies and the effect of Ramadan ".

In Morocco, the fall in average daily rates in Marrakech has affected the overall performance of the country, improving attendance figures in the destination is not yet sufficient to improve profitability. The government is relying on the implementation of the new hotel classification system to increase its competitiveness. Able to maintain strong growth since the beginning of the year, Egypt observed slowing rising hotel indicators this month.

South African hoteliers are maintaining their growth rates, both in terms of occupancy rates and average daily rates. It must be said that the country has been enjoying vibrant tourism activity for several months with a constantly increasing foreign presence: from 10.2% in 2012.

The Levant countries, however, are suffering the effects of the Syrian conflict, with the exception of Turkey, which maintains a relatively stable RevPAR compared to 2011 despite a decline in occupancy rates thanks to the dynamism of Istanbul. Jordan posted a loss of 16.4 OR points resulting in a fall of 19.1% in RevPAR, while Lebanon suffered a sharp decline in average daily rates at the beginning of the year, exacerbated by the contraction in its occupancy. Although negative, the trend is still less disastrous than in March.

This information is an extract from the full Middle East and Africa market performance report, edited by MKG Hospitality. For more information, contact MKG Hospitality (welcome@mkg-group.com - Vanguelis Panayotis).
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