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April 2016: Cold shower for the Middle East

In April 2016, hotel performances in Africa and the Middle East were very gloomy. Only Egypt, thanks to the Nile Valley, and South Africa come out on top. Turkey, meanwhile, is the country whose indicators sank the most.

African and Middle Eastern countries went through a difficult period with hotel results on a downtrend once again. The tourism sector continues to suffer from repercussions of the current geopolitical context.

While Egypt had begun to rise back up in April, it has since experienced yet another airline tragedy that may affect its performance in the future. Its economic situation had begun to stabilize itself although investment and its tourist sector continue to be affected by the country's domestic situation. Its Revenue per available room (RevPAR) rose 5.9%, which is mostly due to results in Cairo where the occupancy rate climbed 10.6 points to 67.6%, and the average daily rate rose to 22.4% thanks to different events. But on a national scale only the average daily rate was up by 20.3% while the occupancy rate dropped 6.9%. South Africa is the primary market with growth: RevPAR +28.8%, with an occupancy rate up by 8.3 points and an average daily rate up 13.2%.

In Turkey the security context has a durable impact on the country which posts the worst results in the Middle East, with a significant deterioration for all its indicators. Another terrorist attack occurred on April 27, preventing the country from contributing to any future improvement of the situation. Its RevPAR posted a drop by 22.9%, its occupancy rate is down 12.7 points, while its average daily rate fell 6.7%. Istanbul thus suffered with an occupancy rate down 22.5 points to 56.4%, which is exceptionally low for Bosporus, which is usually bustling with  tourists at this time of year.

While Morocco appeared  to stand out among other countries in the area, its RevPAR is currently down by 14%. The RevPARs for Marrakech and Casablanca are down by 34.7% and 11.6% respectively.

The downturn of hotel performances in Tunisia continues. while its occupancy rate is steady (-0.1 point), it nonetheless remains low at 41.6%. Its RevPAR is down by 7.6%, with an average daily rate down by 7.4%.

Lebanon and Jordan also experienced a downtrend. Both saw weak improvement in their occupancy rates:  +0.7 points in Jordan and 2.3 points in Lebanon. The two countries saw their average daily rate fall: -9.3% in Jordan, and -15.8% in Lebanon; explaining the net drop in their RevPAR.

All the other countries on the Arabian Peninsula also had poor performances. Kuwait saw its RevPAR drop by (-9.2%) due to a strong drop in its occupancy rate (-8.1 point) that was not compensated for by the slight increase in average daily rate. In Saudi Arabia, the RevPAR in the country deteriorated (-14.2%), cumulating a drop in occupancy rate by 4.7 points and average daily rate by 8.4%.

In the United Arabe Emirates, only Dubai and Dubai City post occupancy rates that are up slightly by 0.1 and 0.4 points respectively, thanks to a 5.1% increase in tourist arrivals in the first quarter 2016. The country is starting a differentiation strategy and is currently trying to expand its range of visitors. But like the rest of the Emirates, the RevPAR is down (-12.1% in Dubai), due to a decrease in prices. The same dynamic is underway in the UAE with a net drop in average daily rate (-16.2%) while the occupancy rate holds up (-0.1 points). In Qatar hotel results are also down, with a RevPAR down by 17.0% due to a drop in occupancy rate (-5.3 points) and average daily rate (-10.9%). 

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