The Middle East’s hotel sector is attracting a great deal of attention from local investors, whose projects are all very ambitious, as well as from major international groups that are seizing these markets’ potential . Governments see the development of tourism as a long-term relay of the oil industry as a source of regional wealth. It must be said that the sector’s current results in the area provide enough to believe this. The RevPAR on 12 months at end July leapt by 36% thanks to significant growth in occupancy rates by nearly 12 points. The average occupancy rate for the previous 12 months thus achieved nearly 70% over the previous year. This growth in occupancy rates is accompanied by a significant increase in the average daily rate by +13%. Most countries in the zone have the wind in their sails. The United Arab Emirates, particularly thanks to the dynamism of Dubai, posts growth in revenue per available room that is very close to that of the zone in general. Egypt has experienced an even stronger evolution (+12 points in occupancy rate and +25% in average daily rates for an increase in its RevPAR by nearly 50%!). the country is a particularly attractive destination. The regular depreciation of the Egyptian pound since 2001, following the decision to stop maintaining its parity with the dollar reinforces this country’s appeal to international clientele. Saudi Arabia, which is undoubtedly not as well perceived in terms of security, nonetheless sees its hotel results stick to a growth trend despite the progressive departure of American servicemen. Religious tourism is developing there, while authorities have extended the periods of pilgrimage to the holy cities, Mecca and Medina.According to Christophe Landais, General manager of the Middle East region for the Accor group, “the main explanation for this strong growth throughout the Gulf countries comes mostly form the increase in intra-regional flow: Arabs form the Gulf, mostly Saudis and Kuwaitis, prefer to travel in the Middle East over the United States and Europe. Dubai and Lebanon benefit from this in particular.” This additional local clientele benefits the leisure segment as well as business tourism, because of the many projects for infrastructures. Toufic Tamim, Director of Sales & Marketing for the Middle East at Mövenpick Hotels & Resorts, confides “the business segment is growing in key cities such as Kuwait City, Dubai, Cairo, Doha and Abu Dhabi, whereas the leisure segment is exploding in three distinct countries: The United Arab Emirates with Dubai, Egypt (the shoreline of the Red Sea, Upper Egypt and Cairo) and Lebanon thanks to the development of intra-regional tourism.” Until today, Egypt and Dubai remained the primary leisure destinations for Western clientele. “Oman, Qatar, and Bahrain are multiplying their efforts to facilitate visa procedures, and to advertis, but nontheless do not benefit from European tourism the way Dubai does,” observes Christophe Landais. Paradoxically, the Iraq war also plays a significant role in the hotel industry’s good results in the Middle East, particularly in Gulf countries that benefited from the presence of American servicemen and the contribution of corporations charged with the reconstruction of Iraq. Mid-term perspectives are very optimistic. “The high price of oil will dope government projects,” confirms Guy Epsom, regional director of Sales and Marketing for the Hilton group on the Arab peninsula. The increase in the price of oil should give local investors even more means for completing their pharaonic projects, such as Palm Islands in Dubai or the Dolphin gas pipeline project, launched by Qatar, which will cross the Arab peninsula. The aftermath of September 11 has revived their taste for investment within their region rather than in the strong American and European markets. Doped by major industrial projects, Business tourism, traditionally weak in July, should continue its growth. Leisure tourism, instead, should continue to benefit from intra-regional tourism that is undergoing full growth. The strategies of airlines, such as Emirates or Gulf Air, consist in increasing the number of flights towards Europe and the United States and proposing stopovers; they provide active support for tourism development plans. In this respect, the country with the most ambition in the area is Qatar, while Bahrain rushes to recover its position as leader, which it lost to Dubai. For the Middle East on the whole, this emulation should confirm this region’s positioning as one of the most dynamic in the world. And the horizon looks fine. Unless it is clouded over by geopolitical events, “2005 will be an even better year,” concludes Christophe LandaisThese generally positive evolutions follow a very delicate period after the terrorist attacks of September 11 and the start of the conflict in Iraq, events that compete to grow evolution rates this year. Nonetheless they come from a real dynamism on the behalf of the hotel industry as July’s results confirm. Radek Cais, Director of the 4* hotel Radisson Diplomat in Bahrain thus claims to be “satisfied with the results of the month of July”. While this month was “not spectacular, the volume of business was there. Upscale hotels decided to drop their prices slightly to attract more clientele.” While we might observe that average daily rates in the Middle East overall are fairly stable from one year to the next, the increase in occupancy assures growth in the monthly RevPAR by more than 12%.
Already signed up? Already signed up? Already signed up? Already registered? Login here!