Hotels in countries and cities across the Middle East continued to post impressive numbers as big events returned and the region lifted all restrictions on travel.
Colliers’ ‘MENA Hotels Quarterly Paper’ for the second quarter of 2022 shows occupancy rates, average daily rates (ADR) and RevPAR levels (a hotel’s ability to fill its available rooms at an average rate) have all had significant increase.
It was no surprise that the UAE continues to lead as one of the top global tourism destinations. With Dubai recording a 197 percent year-on-year growth in international overnight visitors from January to May 2022, the UAE has received 6.17 million visitors in 2022 as compared to the 2 million last year for the same five-month period.
All markets in the UAE saw an increase in performance levels in comparison to 2021 figures, with Dubai, Abu Dhabi and Sharjah experiencing the highest increases in RevPAR levels.
The occupancy change has grown 30 percent for Dubai, 31 percent for Abu Dhabi and 15 percent for Sharjah, ADR has improved by leaps and bounds. Dubai ADR went up 54 percent, compared to 8 percent for the same period last year, while both Abu Dhabi (35 percent) and Sharjah (53 percent) have come out of red numbers (-7 and -11 percent respectively).
The UAE now has 116,800 branded keys, with Dubai adding 2,466 new rooms in the first two quarters of 2022. An additional 1,300 keys of quality hospitality supply are expected to enter Dubai in the second half of the year. Sharjah is expected to introduce 282 new keys, Ras Al Khaimah 696 and Fujairah 175.
Holy Cities drive KSA numbers
Even with the current RevPAR 6 percent below Q2 2019 figures, the overall Q2 hospitality performance in major KSA tourism destinations indicated improving market-wide figures. The recent increases in demand are attributed to the return of pilgrims to the two Holy Cities and government-led tourism initiatives, like ‘Jeddah Season’ which ran from May 2 to June 30.
The Holy Cities (occupancy change of 177 percent in Makkah and 122 percent in Madinah) indicated the greatest increase in YTD occupancy and ADR change in Q2. This increase comes after the introduction of online Umrah visa services which helped secure over 23 million Umrah permits in the first half of 2022.
The total branded hotel keys in the Kingdom reached approximately 63,100 in Q2 2022 with 2,700 new rooms. Colliers expects supply in the Saudi market to increase at a CAGR of 10 percent from 2022 to 2024, accounting for an additional 14,200 keys in the market.
Doha in focus
Doha experienced a huge recovery in terms of occupancy levels (141 percent) and ADR (20 percent) and this is expected to increase further as the FIFA World Cup 2022 nears.
Approximately 1,256 branded rooms have entered the market between Q2 2021 and Q2 2022, and the city is expected to add approximately 30,500 more keys as several projects are nearing completion ahead of the Football World Cup.
Return of Egypt
Egypt benefited from the lifting of travel restrictions and the ‘Egypt Never Sleeps’ summer tourism campaign in June as key destinations such as Cairo, Hurghada and Luxor gained international attention, with the cities being recognised by TripAdvisor as some of the most popular tourist destinations to visit in 2022 and 2023.
Occupancy rates in Cairo increased 71 percent compared to the same quarter last year, while ADR was up 69 percent. After a decline of 12 percent in ADR in Q2 2021, the Red Sea destination Sharm El Sheikh was back in favour of tourists, posting a 50 percent increase.
With over 17,000 professionals operating in 63 countries, Colliers International is a global player in commercial real estate services. It was ranked as the second-most recognised commercial real estate firm in the world in the latest annual survey by the Lipsey Company.
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