Middle East, North Africa Destinations to See Decrease in Demand for 2009

According to end-of-year results released by MKG Hospitality’s market monitor database, Hotel Compset, Oman was the most improved destination throughout the Middle East & North Africa (MENA) region in 2008, recording 34 percent Revenue per Available Room (RevPAR) increase. Oman’s performance included growth of nearly 40 percent in Average Daily Rate.  Jordan had 26 percent growth in RevPAR, driven by a 17 percent increase in ADR and an 8.4 percent rise in Occupancy Rate (OR). Egypt, Qatar, Bahrain, Algeria and Tunisia also all recorded good results.
Overall however, Qatar recorded the highest RevPAR at $223, followed by the UAE at $211 and then Oman and Bahrain, almost equal at $164.

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According to a statement by the Director of Development, MKG Hospitality, Vanguelis Panayotis, the economic downturn will impact the tourism sector in the coming months as consumers and companies cut back on travel expenses.

Forecasts suggest that the situation will deteriorate over the next six to nine months. Most countries in the region have already started to see a decrease in or signs that demand has dropped. Hoteliers are now expected to further reduce their prices in order to encourage more guests.

However, Panayotis is quick to warn that when ADR decreases for several months versus year-to-date, it is a clear sign of recession.

The higher the category, the more volatile price is. Hotels in MENA are in the mid-scale to upscale market, so that region might show stronger decreases than markets with more budget rooms. This year and 2010 should see the development of more budget-orientated products in the region, such as Express by Holiday Inn, Ibis and the new concept from Rotana, Centro.

According to Panayotis however, the fact that international and regional hotel operators dominate the region is a good sign, as it will help withstand the downturn, with their versatility to reduce the impact of recession and to maximize operational efficiency.

Words of Wisdom
Revenue Manager, Millennium Hotel Abu Dhabi, Ahmed Rasmy suggests hotels focus on cost and revenue during trying times.

MKG Hospitality will be participating at the HOTEC Middle East 2009 Panel Discussion in April.

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