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Dubai leads Mena hospitality as average occupancy hits 90%.

Room rates and revenues climb in first four months of 2014

Dubai leads the Middle East and North Africa (Mena) hospitality market as the emirate maintains its supremacy in terms of occupancy level, room rate and revenue during the first four months of the year, the latest survey released by Ernst and Young revealed on Sunday.

During the January to April period, Dubai's city hotel average occupancy level reached 90 per cent and average daily rate (ADR) jumped to $241 from $226 during the same period last year, resulting in an increase in revenue per available room (RevPar) of 6.8 per cent. The emirate beach properties ADR recorded at $473 -- the highest in the region, according to the EY ME Hotel Benchmark Survey for April 2014.

During the first four months of 2014, Cairo witnessed the lowest occupancy level of 27 per cent. Sharm El Sheikh, a popular tourist place in Egypt, recorded the lowest average daily rate ADR of $47 in the region during the first four months of 2014. Overall, the UAE's hospitality market also saw healthy growth in April 2014, with Dubai's overall average occupancy levels remaining stable at approximately 85 per cent in both April 2013 and 2014, even given the notable increase in room supply over last year. These positive occupancy levels were coupled by an increase in ADR from $308 in April 2013 to $327 in April 2014, resulting in an increase in RevPar of 5.6 per cent during the same period. April is one of the busiest months of the year for Dubai as the emirate hosts a range of events that help boost visitor numbers.

While April 2014 ADR in Dubai was higher than March 2014 rates, average occupancy levels dropped from 90 per cent in March 2014 to 84 per cent in April 2014. The slight month over month decrease in occupancy from March to April is in line with the market's typical seasonality, as tourism inflows begin to slow towards the hot summer months.

"April was another positive month for the hospitality industry in the Middle East. As we transition into the summer months, less tourists are expected to visit the region and occupancy rates will gradually decrease. However, a number of key markets still demonstrated strong performance in their hospitality sectors in April, including the UAE and Saudi Arabia," Yousef Wahbah, Mena head of transaction real estate at EY, noted on the survey.

"Hospitality market performance across the Mena region varied in April. There were slowdowns in some markets, but we continue to expect that, overall, the region's hospitality sectors will perform strongly throughout the remainder of 2014," added Wahbah.

Hospitality markets in Jeddah, Riyadh and Makkah witnessed an increase in occupancy in April 2014. Jeddah's average occupancy levels increased by two percentage points from April 2013, coupled with a jump in ADR of 11.2 per cent during the same period, from $235 to $262. According to the Saudi Commission for Tourism & Antiquities (SCTA), Jeddah is experiencing an increase in the number of tourists due to the continuous growth of religious Hajj and Umrah tourism.

This trend is in line with the country's vision to become one of the most important and attractive destinations in the Middle East after the completion of new projects, such as the King Abdulaziz International Airport, the upgrading of accommodation facilities, and the major expansion of the Two Holy Mosques, in Makkah and Madinah.

The hospitality markets in Bahrain and Qatar performed well in April, with both countries witnessing increases in their occupancy rates by three percentage point and four percentage point respectively.

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:70MID
Date:Jun 23, 2014
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