Contact: Sian Mannakee
Deloitte UK Public Relations
+44 20 7303 7883

London, May 4, 2008 – Hotels in the Middle East were the top performers during the first quarter of 2008. Analysis by Deloitte shows that the region now has the highest average room rates in the world at US$181, overtaking Europe for the number one spot. The Middle East also achieved the highest occupancy in the world at 74.3 percent. This impressive hotel performance resulted in revenue per available room (revPAR) of $US134.2, up 19.4 percent on the same period last year. 

"Middle Eastern governments are committed to long-term strategies to move away from reliance on oil and associated revenues and are investing substantially in tourism products and services that will appeal to different market segments, including the corporate sector," said Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte. "While some markets that have experienced amazing performance over the past few years are now slowing down, even at this less frenetic pace they are still achieving results which will make hoteliers in other parts of the world envious."

Looking ahead, Rob O’Hanlon, Tourism, Hospitality and Leisure Partner for Deloitte Middle East, said: "With the strongest occupancy and average room rates in the world, hotel performance in the Middle East is off to a very good start in 2008. If the rest of 2008 follows the pattern already set for the first quarter, hoteliers could enjoy a remarkable five-year run of double-digit growth."

So far in 2008, the hotel industry in the Middle East has been characterised by two distinct markets. The first has shown strong absolute revPAR, growth in average room rates and often a decrease in occupancy due to the influx of new supply. Examples of this market include Dubai and Doha. The second type of market in the Middle East is achieving a much lower absolute revPAR but is experiencing exceptional revPAR growth driven by increases in both occupancy and average room rates. Amman and destinations in Egypt are examples of this type of market.

Dubai
Healthy double-digit revPAR growth continues in Dubai albeit at a slower pace than last year. 2008 is off to a good start with revPAR at US$315, the strongest revPAR in the Middle East.  Even though occupancy was down a marginal 1.2 percent, both occupancy and average room rates are impressive in absolute terms at 88.6 percent and US$356 respectively.

Doha
During the first quarter of 2008, Doha saw a slight increase in revPAR. Several new hotel openings in Doha have increased the supply of rooms in the market making it more difficult for hotels to achieve high occupancy levels.  According to Lodging Econometrics, 31 hotels or 9,770 rooms are currently in the pipeline for Doha which makes attracting more tourists very important if this supply is to be absorbed.

Egypt
Egypt is becoming more popular with tourists due to the current low price of luxury status accommodation.  Taba came out on top during the first quarter of 2008 in terms of revPAR growth, achieving a staggering 107.7 percent increase.  Occupancy grew from 43.1 percent to 68.1 percent suggesting that the 2004 terrorist attacks are no longer overshadowing the decision to spend time in Taba. However, when looking at absolute revPAR, the sunny destination is the lowest in the Middle East at US$25. Following the same trend are cities such as Alexandria and Luxor achieving revPAR of US$57 and US$48 respectively.

Amman and Jordan
During the first quarter of 2008, hotels continued to perform well in Amman as occupancy increased 20.7 percent to 64.5 percent. Average room rates increased 13.6 percent to US$129.  The government’s National Tourism Strategy 2004–2010 has set goals to increase tourism receipts to US$1.84 billion and doubling tourist arrivals to 12million by 2010.  At the half way mark, Jordan has already achieved its tourism receipts target, surpassing it three years early.  According to Jordan’s central bank, tourism revenues increased to US$2.11 billion during the first 11 months of 2007.

Abu Dhabi
RevPAR growth in Abu Dhabi increased 24.4 percent to US$252 during the first quarter, with occupancy increasing to 86.7 percent.  Average room rates fuelled this growth up 17.0 percent to US$291, the second highest average room rates in the region after Dubai.  After a 31 percent jump in passenger traffic at Abu Dhabi International Airport in 2007 and a long list of attractions being developed, including the new Formula 1™ Etihad Airways Abu Dhabi Grand Prix in 2009, the emirate’s success is likely to continue. According to the Abu Dhabi Tourism Authority, 20,000 additional hotel rooms will be needed to meet the Emirate’s projected tourist traffic of 3.5m.  According to Lodging Econometrics there are 64 hotels or 19,482 rooms currently in the pipeline.

Beirut
Meanwhile, hotel performance in Beirut achieved a 20.5 percent increase in revPAR..  A low occupancy of 36.8 percent and average room rates of US$115 it is clear that the Lebanese capital continues to struggle to attract tourists within the framework of continued political instability.

Hotel performance in the Middle East, Q1 2008
Location	Occupancy (%)	Average room rate (US$)	RevPAR (US$)	RevPAR chang (%)
Middle East	74.3	180.7	134	19.4
Abu Dhabi	86.7	291	252	24.4
Alexandria	71.4	80	57	44.7
Amman	54.5	129	83	37.1
Beirut	36.8	115	42	20.5
Cairo	83.0	125	104	31.3
Doha	77.3	274	212	1.8
Dubai	88.6	356	315	12.5
Hurghada	76.2	45	34	23.3
Manama	72.1	231	166	21.9
Muscat	84.2	275	232	35.4
Riyadh	82.8	249	206	22.9
Taba	68.1	36	25	107.7
Source: HotelBenchmark™ Survey by Deloitte

Note: All analysis in U.S. dollars.

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