Tourism & Hospitality | Saturday 28 March, 2015 1:22 am |

 The three major cities; Madina, Riyadh and Jeddah saw their RevPAR in 2014 increase by 7.3%, 11.2% and 6.8% respectively compared to 2013
 Riyadh’s average occupancy levels increased by 3.0% in January 2015 when compared to the same period last year
 Occupancy and ADR dropped in Jeddah and Madina in January 2015 compared to January 2014

The MENA region’s hospitality market saw stable growth across key performance indicators in 2014, according to EY’s Middle East Hotel Benchmark Survey Report. Amid the ongoing oil price volatility, the sector may face a possible slowdown in 2015 if price remain low or continue to decrease.
Yousef Wahbah, MENA Head of Transaction Real Estate at EY says:
“If occupancy rates are to remain the same or decrease; the extra supply that is slated to enter the MENA hospitality market in 2015, coupled with unstable oil prices, may have an effect on the industry’s growth rates over the coming year. Conditions may not be as vibrant as they were in 2014. In terms of transactions, the hospitality sector may see a drop in the number of deals given the uncertainty in the market. The next six to nine months will be a critical period for the industry to monitor whether oil prices stabilize and how much effect this will have on the number of hospitality transactions and developments in the region.”
2014 hotel performance
The three major cities; Madina, Riyadh and Jeddah saw their RevPAR in 2014 increase by 7.3%, 11.2% and 6.8% respectively compared to 2013. The Saudi cities are expected to have a strong pipeline of new hotels based on the strong performance that has been witnessed across the country’s hotels.
The UAE remained the top performer in the MENA region in terms of occupancy in 2014, maintaining a high average of 79% in Dubai and Abu Dhabi. RevPAR saw a slight dip in the two cities compared to 2013 due to the large room supply that came online in 2014.
In the wider MENA region, Cairo, Manama, Doha saw noticeable increases in both occupancy and RevPAR. Cairo saw its occupancy increase from 26% in 2013 to 35% in 2014, and more notably saw an increase of 53.1% in RevPAR largely due to a 15% increase in average room rate compared to 2013.
2014 was a positive year for Doha; the city saw it’s occupancy rise by 7%, leading to an increase in RevPAR of 13.4%. Doha maintained a high occupancy rate of 70%, one of the highest across the MENA region.
January hotel performance
In January 2015, Riyadh’s average occupancy levels increased by 3.0% when compared to the same period last year, however, average daily rate (ADR) witnessed a drop of 4.6%. Occupancy and ADR dropped in Jeddah and Madina in January 2015 compared to January 2014 resulting in a drop in RevPAR of 3.1% and 12.0% respectively.
“Overall the MENA hospitality market continued to see stable rates across the peak tourism season which lasts until March. With the increase of conferences and events held in the region, paired with the mild weather, we can predict this growth to remain stable and continue into the coming months. We expect the UAE, Saudi Arabia and Qatar hospitality markets to maintain high occupancy and RevPAR levels. It may be difficult however for the MENA region to sustain the same level of positive performance if oil price stays low or continues to drop beyond the next six to nine months,” concludes Yousef.