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January 2016: Middle Eastern hoteliers at a standstill

The hotel industry began 2016 the way it ended 2015 in the Middle East, meaning with business results down. Only one country was able to rise above the others during this period.

Monthly results of hotel chains by country
January 2016

In January 2016, hotel activity in North Africa continued along a downtrend despite growth in average daily rate in three destinations. The region could feel the ongoing impact of the high security measures taken in Western source countries on potential tourists.

While it resisted in December 2015 with hospitality results similar to those the previous year, Algeria sank into the regional depression in January 2016. Professionals in the country experienced a 3.8% drop in their Revenue per available room (RevPAR), mostly due to the 2.8 point drop in occupancy rate. Morocco also experienced a drop in its occupancy rate by 3.4 points resulting in an occupancy rate down by 3.5% RevPAR.

Hotel activity in Tunisia continued to feel the terrorist attacks' impact on tourism, and the drop in results on the sector in January is comparable to that in December 2015 with a 15.2% drop in the RevPAR. The trend will be difficult to reverse in the coming months following the new terrorist attack on the Island of Djerba this week, although this attack was not directed against tourism.

Egypt's hospitality industry also posted a drop in activity on the period, with a 12.3% drop in its RevPAR. This is primarily due to poor results on the sector in the Sinai Peninsula, particularly at the beach resorts of Hurghada and Sharm-El-Sheik, which are still feeling the impact of the Metro Jet crash last November. Only the city of Cairo was able to improve its RevPAR by 10.4% on the first month of the  year.

Another victim of several attacks in recent months, Turkey began the year with a 1.2% drop in the RevPAR at its hotels. This is primarily due to the 2.2 point drop in occupancy rate that was not compensated fro by the 3% growth in average daily rate. Results in Istanbul are the primary cause of this nationwide downtrend due to an occupancy rate down by 6.5 points. Other cities in the country, instead, saw their RevPAR progress by 10.3% in this first month of the year.

The period also looks depressed in Levant countries. Jordan's hotel industry experienced a new 20.7% drop in its RevPAR this month, due to a combined drop by 8.2% in the ADR and by 5.1 points in the occupancy rate. In Lebanon, while occupancy in the capital remained stable (+0.8 points in the occupancy rate), teh 11% drop in average daily rate led to the 9.6% drop in the RevPAR.

Bahrain is, meanwhile, the only country on the Arabian Peninsula to have posted an increase in its RevPAR on the period. It rose by 1.2% to a level similar to that in December 2015. Hotel activity in the country was driven once again by the organization of events that generate business, such as the Bahrain International Airshow that took place from January 21 to 23 in Manama. The city's occupancy rate thus progressed by 3.5%, making up for the 4.7% drop in average daily rate.

In January, the RevPAR was down once again in Qatar (-21.6%), in the United Arab Emirates (-9.6%) and in Oman (-9.9%), although several international events were organized at these destinations: QBX Expo 2016 from January 10 to 12 in Doha, the International Water Summit from January 18 to 21 in Abu Dhabi, and the International Exhibition of Medical Tourism, Medical Equipment and Technology Medicine in Mascate from January 18 to 20.

The Kingdom of Saudi Arabia is also following a downtrend, with a 7.4% drop in the RevPAR. The average daily rate remains stable (+0.1%), but the occupancy rate fell by 5.2 points. Finally, Kuwait posted an 11.7% increase in its average daily rate, which, however, did not prevent the 9.7 point drop in occupancy rate from leading to a 5.7% drop in the RevPAR.

Also read:

  • December 2015: a morose end of the year for Middle Eastern hoteliers
  • Algeria is trying to make up for its hotel deficit
  • Tunisia: a grim tally for tourism in 2015

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