p14-15 City jun 5 3/6/09 20:12 Page 14
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Special report Middle East hotel investment
Mid-East hotels
ride the recession
Globally, hoteliers are cutting costs and rates yet the Middle East
is said to be well placed to beat the downturn. April Hutchinson
reports from the Arabian Hotel Investment Conference in Dubai
W
ith the number of tourists The big question is whether supply could
travelling to the Middle East outstrip demand in Abu Dhabi, where more
increasing by 11.3% last year – than 1,600 rooms are set to open in 2009 and
more rapidly than to anywhere a further 6,000 rooms in the next couple of
else in the world – the region’s hotels had years, including 30 hotels being planned by
never had it so good. local developer Aldar Hotels and Hospitality.
And even this year, with the recession having Big success stories include Saudi Arabia and
kicked in, they look best placed to ride the storm, Lebanon. Beirut experienced a 157.6% rise in
despite talk of over-supply and softening of revpar in the first quarter of the year, up to
profitability, according to the latest Middle East $110, and hotelier Gordon Campbell Gray and
Performance Review from Deloitte. Four Seasons are on track to open hotels there
So far for 2009, the Middle East continues this year while Ritz-Carlton and several other
to be the best-performing region for hotels, hoteliers are also eager to sign projects.
achieving the highest occupancy, average room
rates and revenue per available room (revpar). Source markets
But the figures are negative. During the first Tourism in the Middle East has suffered
three months of the year, revpar dropped by because of the financial troubles in many of
12.9% to $142 off the back of a 9.9% decline in its key markets, especially Europe, while
occupancy. dollar-pegged destinations such as UAE have
instantly become 30% more expensive for
Mixed fortunes travellers from the UK. The UK accounts for
Marvin Rust, Deloitte’s hospitality global 15% of total demand for the emirates.
managing partner, said: “The Middle East and But global route and capacity expansion by
North Africa as a region has seen major growth Middle Eastern carriers have opened up new
in hotels across the board over the past five source markets. Qatar Airways, for example, has
years; the region recorded its fifth consecutive added a non-stop 17-hour service to Houston.
“We had average
year of double-digit growth in revpar in 2008. Emirates will bolster capacity on existing
“And although we are seeing negative routes by 14% this year and Etihad plans to
room rates of $1,000
growth everywhere else in the world economy grow by 15% this year.
for 2007-08 at the
except the Middle East, we can still see Flydubai, a government-backed no-frills
occupancy down in some parts of the region for carrier launching soon out of Dubai, will also
Burj Al Arab, and
the first quarter.” stimulate demand by connecting the Middle our attitude is that
But there are some success stories. Deloitte East, North and East Africa, south-east Europe
the Burj is not up
said average room rates in Abu Dhabi grew by and the Indian sub-continent.
24% in the first quarter of 2009, with revpar Areas where revpar was dropping and
for negotiation”
up, to $290, from $265 year-on-year. average occupancy was down included Amman,
14 05.06.2009
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