GCC hospitality on track to reach $32.5bln by 2022, thanks to Expo 2020, other global events that will be hosted in region
Hotels in the Middle East reported mixed performance results, while hotels in Africa posted mostly positive results across the three key performance metrics in October, according to data from STR.
Hotels in the Middle East recorded a 6.5 per cent upswing in occupancy to 67.6 per cent in October while clocking an average daily rate (ADR) of $143.62, down by 3.9 per cent. Hotels in the region recorded 2.3 per cent surge in revenue per available room (RevPAR) to $97.07.
Hotels in Jeddah recorded 23.9 per cent rise in occupancy to 48.1 per cent while posting an ADR surge of 14.9 per cent to SAR778.34 and RevPAR growth of 42.4 per cent to SAR374.69.
While the market registered a double-digit increase in occupancy, the absolute level in the metric was the second-lowest for an October since 2001. STR analysts noted the market's substantial increase in demand (up 30.2 per cent). Helping that growth was the opening of King Abdul Aziz International Airport's Terminal 1 and an increase in the number of international flights in the market.
An industry report by Alpen Capital in June had predicted that the GCC hospitality market was on track to reach $32.5 billion by 2022, thanks to Expo 2020 and other global events that will be hosted in the region over the next few years.
The Hotels Market Report by Ventures Onsite expects 25 million visitors to come to the UAE for Expo 2020 in preparation for which "Dubai's hotel room supply is expected to reach 132,000 in 2019, with Dubai aiming to complete 160,000 hotel rooms by October 2020".
The report said that the UAE would continue to lead the GCC's luxury hospitality segment till 2022 with "73 per cent of existing luxury hotel stock and 61 per cent of the region's pipeline located in the country". During this time period, the report also anticipates that 'Saudi Arabia will witness the most significant increase in luxury hotel supply.
Driven by projects in Dubai, the UAE accounts for 45 per cent of the GCC region's current hotel development pipeline, according to industry analyst ProTenders.
The percentage figure equates to 652 projects worth a combined value of $107.8 billion currently planned, on hold or underway in the UAE.
Of this figure, $41.6 billion-worth of hotel projects are currently under construction in the Emirates.
According to ProTenders, Dubai is the UAE's largest hotel market, with 721 hotels and hotel-apartments currently operating in the emirate, boasting a combined guestroom inventory of 118,382, while Abu Dhabi is home to 168 hotels and a combined inventory of 33,000 guestrooms.
According to Dubai Tourism, Dubai's hotel room inventory will reach 132,000 by the end of 2019, up from 107,000 at the end of 2017. The increase in capacity will accommodate Dubai Tourism's forecast - based on 2018 trends - that occupied room nights in the city will reach 35.5 million by the end of 2019.