Bookmark Email Print page

Deloitte: Lower demand for Middle East hoteliers in Q1 2009

Beirut, Makkah and Jeddah continue to achieve the strongest revenue per room increase in the region

A report produced quarterly by Deloitte, the business advisory firm, has found that revenue per available room (revPAR) in the Middle East region dropped by 12.9% to US$142 during Q1 2009, driven by a 9% fall in occupancy levels. However, this decline is not as extreme as other world regions and the Middle East continues to be the best performing region, achieving the highest occupancy, average room rates and revPAR.

 

Commenting, Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte, said: “It’s clear that the economic situation has deteriorated and consumer and business spending is in sharp decline, with less spend available for travel. As a result, tourism’s contribution to gross domestic product is expected to contract by 3.6% this year according to the World Travel and Tourism Council. The weakening economy here and across major source markets is now hurting hoteliers.”

 

Despite falling revPAR across the region there are still some notable success stories. Beirut, for instance, blessed with increasing political stability, continues to achieve the strongest revPAR increases in the Middle East, up 157.6% to US$110 during the first quarter of 2009. Abu Dhabi took fourth position behind Beirut, Makkah and Jeddah in terms of revPAR growth, up 16.8% driven by average room rate growth of 24.3%. Hoteliers in the Emirate have achieved the highest levels of occupancy, average room rates and revPAR in the Middle East.  

 

Pulling down the regional average is Dubai, which experienced the fastest revPAR declines in the Middle East, down 36% to US$203. The Emirate is experiencing an increase in supply when demand from source markets in recession has decreased.  

   

Looking ahead, Rob O’Hanlon, Tourism, Hotel and Leisure partner at Deloitte Middle East, added: “There are several factors that will help ensure a brighter, long term future for the Middle East including its geographical position, mix of source markets, growing importance as an aviation hub and the size of investments in the region. In the meantime, it will be a fine balance between maintaining the standards of quality travellers expect in the Middle East, but at a lower cost; offering greater value while maintaining profitability; and keeping control of budgets while laying the foundations for the future.”

 

Top five and bottom five Middle East markets by revPAR growth for the first quarter 2009

 

 

 

 

 

 

 

Occupancy
(%)

Average room rates
(US$)

RevPAR
(US$)

Change
(%)

 

Beirut

66.0

167

110

157.6

 

Makkah

45.2

170

77

32.7

 

Jeddah

67.0

174

116

30.3

 

Abu Dhabi

81.6

355

290

16.8

 

Manama

70.8

235

167

3.5

 

 

 

 

 

 

 

Dubai

72.4

281

203

-36.0

 

Taba

49.3

37

18

-29.2

 

Luxor

59.6

59

35

-26.7

 

Cairo

67.5

126

85

-17.7

 

Sharm el Sheikh

66.2

68

45

-15.4

 

 

Source: STR Global

 

Notes to editor:

All analysis in US$.

Last Updated: 

Attachments

Get Acrobat Reader

Contacts

Name:
Nada Haddad
Company:
Deloitte
Job Title:
ME Communications Manager
Phone:
+961(0) 1 748 444
Email
nadahaddad@deloitte.com