MARCH/APRIL 2013
Middle East
ARABIAN
SOMETHING STRANGE IS STIRRING in the Middle East. In a region renowned for the over-the-top opulence of its travel products, there appears to be the beginnings of a shift, if not downmarket, then at least down the price scale. Of course, it is an inconvenient
travel management truth that, aside from pure physical geography, the Middle East simply does not exist as a cohesive entity. While most other world regions
are glued together by cultural commonalities, the Middle East is defined by the exact opposite: Islam versus Christianity; Sunni versus Shi’ite; hardliners versus liberals; fantastic wealth versus abject poverty – the region is riven with contrasts, if not outright conflicts. Iran and Syria are now pariah
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states; Dubai most definitely isn’t. The hardline rule prevailing the Kingdom of Saudi Arabia is a world away from the relatively liberal Jordan. Bahrain is going through the
Arab Spring mill but Iraq, which has endured much worse, is ‘enjoying’ a significant resurgence. Against this backdrop, trends are difficult to identify. However, the
exception to this chaotic norm comes in the shape of the hospitality sector. In very general terms, a posh hotel is a posh hotel, whether it is in Manama or Muscat, Doha or Damascus, so comparisons can be made and conclusions drawn.
DIFFERING VALUES Perhaps the most telling statistics come from hotel industry number- crunchers STR Global, which recently revealed that of the 68 international chain hotels that made their debuts in the Middle East/North Africa (MENA) region in 2012, only ten were in the ‘upper upscale’ bracket. Looking ahead through the
lengthy list of this year’s planned openings, while the Jumeirahs and the Kempinskis of this world still feature strongly, so too do Tulip Inns and Best Westerns; Park Inns sit alongside Pullmans; Premier Inns are springing up everywhere. Until relatively recently, Dubai
was close to the top in HRG’s annual corporate room rate rankings. This year it is in 26th place. The average overnight cost of £154.18 is more than £100 cheaper than in top-placed Moscow (see Databank, p18).
NIGHTS ROOM
While the political outlook in the Middle East remains in a state of flux, hotel investment in the region continues apace. Bob Papworth reports
According to Paris-based MKG
Hospitality, revenue per available room (revPAR) across the MENA region rose 8 per cent last year – but that increase was largely due to recovery in North Africa, where hotels had a miserable 2011. Revenues in Qatar were hit by
over-supply, while the bloody conflict in Syria dented hotelier fortunes in neighbouring Lebanon. Kuwaiti revPAR rose, but with occupancy levels bumping along at little more than 50 per cent – similar to those in Riyadh – that was hardly cause for celebration. MKG director of development,
Vanguelis Panayotis, warns: “Although there is recovery, the situation is still quite fragile and certainly susceptible to another dip.” Investors seem undeterred, with
scores of new properties opening across the region. Increased supply at the top end of the market means tougher competition, and that should help drive down prices. However, it is the growing number of mid-market, and even budget, offerings that will not only begin to correct a sectoral imbalance and give travel buyers greater choice, but also – hopefully for buyers – push average room rates lower.
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