November 2013: the Middle Eastern hotel industry progresses

In November 2013, hotel industry results on the North African and Middle Eastern markets are globally on a growth trend. The period is traditionally favorable to MICE activity and business tourism, particularly in Gulf countries and before the winter holidays of Western clientele.

In North Africa, Algeria achieved growth by 3.2% in the RevPAR due to an increase by close to 2 points in occupancy rates. These results are generally positive for the country's hoteliers, which had recorded a good November in 2012 with local elections and other important events in the country. The change in results in Tunisia is also positive, but this remains primarily driven by the increase in average daily rates in the capital city.

Inversely, results in Morocco's hotel sector have marked a sharp drop on the period, with a decrease by more than 13% in Revenue per available room due to a significant drop in average daily rates, by around 14.4%. The trend is more marked on the two majory markets in the country, meaning Marrakech and Casablanca. Marrakech indeed posts the strongest drop in its RevPAR (-16.3%) due to the absence this year of events that fed the business in 2012, such as the Luxury Tourism Expo Show and the International Exhibition of Optics held last year. In Egypt, as in previous months, hotel performances were down sharply. The combined drop in occupancy rates (-23 points) and average daily rates (-13.8%) led to a 44% drop in Revenue per available room.

In Levant, all the markets are showing an uptrend. Lebanon hotels gained 21.4% in RevPAR, resulting from the strong growth in occupancy rates linked to the arrival of Syrian clients with high buying power who are fleeing their country. The drop in occupancy in Turkey's hotel industry (-1 point) was compensated for by increased average daily rates (+5.8%) resulting in growth by 4% in Revenue per available room (in local currency). In Jordan, hotel results are also improving, particularly in the city of Aqaba, on the Red Sea, which benefited from stronger tourist activity compared to the same month  in 2012.

In the Arabian Peninsula, beyond Saudi Arabia and Qatar, markets are on a growth curve. The best increases in terms of hotel occupancy were in Oman and Kuwait, with growth by more than 6 points over November 2012. Results for the Saudi hotel industry were naturally strongly influenced by those in Mecca, which saw its RevPAR drop by 37.6% due to the decrease by more than 40% in average prices; this evolution results from the limited number of visas granted to pilgrims in 2013 because of ongoing works in the Great Mosque. On the other hand cities such as Riyadh or Jeddah were able to maintain and even see their results grow.

This information is extracted from the full performance report by market in North Africa and the Middle East produced by MKG Hospitality each month. For more information, contact MKG Hospitality (welcome@mkg-group.com -Vanguélis Panayotis).