JEDDAH — Out of the major cities in MENA, Jeddah had the highest occupancy in September 2015 at 84%, followed by Madinah at 72% and Dubai at 68%.
Pilgrims who come to Saudi Arabia often visit Jeddah before or after Haj which could be a reason for the high occupancy in Jeddah. It is also common for pilgrims to stay in Madinah while they are in Makkah to visit Al Masjid Al Nabawi as it is the second holiest city for Muslims after Makkah.
Commenting on the survey, Yousef Wahbah, MENA Head of Transaction Real Estate at EY, said: “Hospitality markets in Makkah, Ras Al Khaimah, Manama witnessed a positive increase in revenue per available room (RevPAR) compared to the same period last year.”
Makkah’s hospitality market witnessed the highest change in RevPAR compared to September 2014, mainly due to pilgrims arriving in the city to perform Haj. Makkah saw an increase in RevPAR of 83.2% in September 2015 when compared to the same period last year and a 28.8% increase in room rate. Occupancy increased from 50.0% in September 2014 to 72.0% in September 2015 in the holy city.
In September 2015, Ras Al Khaimah’s hospitality market witnessed a double digit increase in RevPAR of 55.5% when compared to the same period last year. This was mainly due to the increase in ADR from $98 in September 2014 to $141 in September 2015. Occupancy also increased from 58.3% in September 2014 to 63.0% compared to the same period last year, which is attributed to the efforts of Ras Al Khaimah’s Tourism Development Authority that continues to promote RAK as a primary affordable luxury destination.
Kuwait and Riyadh’s hospitality market performance dropped when compared to September 2014. RevPAR dropped in Kuwait from US$130 in September 2014 to $91 in September 2015, mainly due to the decrease in occupancy by 14.0% in September 2015 when compared to the same period last year.
Dubai and Abu Dhabi’s hospitality markets also witnessed a drop in RevPAR performance when compared to September 2014. The slowdown of growth in both Abu Dhabi and Dubai’s hospitality sector may primarily be attributed to the decline in tourists from Europe (as a result of economic slowdown in the Eurozone and weakening of the Euro) and an increase in the supply of hotel rooms.
Year-to-date performance (Jan-Sep 2014 compared to Jan-Sep 2015). The highest year-to-date 2015 figures were reported from Dubai-beach hotels, recording an average ADR of $352 from January to September this year. Dubai beach hotels continue the trend of being the highest yielding market in MENA, with a RevPAR of $280. The highest market performance was observed in Dubai–overall at a occupancy of 79% year-to-date.
