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Alexandria tops MENA’s ADR growth with 27% in Q1 of 2019 - Daily News Egypt

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Alexandria tops MENA’s ADR growth with 27% in Q1 of 2019

Sharjah achieves 11% increase in hotel supply, followed by Riyadh, Alexandria, Amman with 18%, 6.7%, 6%, respectively


The Mediterranean city of Alexandria is the stand out market in Middle East and North Africa (MENA) hotels in the first quarter (Q1) of 2019, with a 10% growth in occupancy and 27% growth in average daily rate (ADR), according to Colliers International’s MENA quarterly review report issued on Sunday.

In the second spot came Abu Dhabi with an 11% increase in ADR in 2019, an improvement compared to the same periods in 2017 and 2018.

Regarding Egypt’s overall performance, Colliers believes that positive performance in the Egyptian market has resulted in renewed investor confidence, evidenced by the announcement of new hotel projects, such as Steigenberger and Rixos.

Furthermore, the report indicates that the coastal cities have started the year with a strong performance,

experiencing double digit improvements in occupancy and ADR over the previous year.

Therefore, Colliers concluded that the Egyptian hotel market continues to improve with the return of key international markets and a growing regional demand from MENA markets.

“The 2019 Africa Cup of Nations returns to Egypt, and is expected to attract an estimated 50,000 tourists in returning international market, 2019 is expected to be another year of positive hotel performance,” the report adds.

In regards to Egypt’s North Coast, the report cites increased domestic tourism demand over the

last four years, and is expected to improve its occupancy by 5% and the ADR by 17% in 2019.

Moving back to the United Arab Emirates (UAE), the report indicates that with the anticipated opening of Yas Bay Arena and Clymb (indoor skydiving and wall climbing centre) in 2019, Abu Dhabi is expecting to boost its leisure and sports tourism available offerings.

On the other hand, Dubai witnessed the opening of two luxury properties in Q1 of 2019, namely the W Dubai and the Mandarin Oriental Jumeirah Beach, taking the total of newly opened keys to 1,626. Sharjah (219 keys) and Abu Dhabi (113 keys) opened one property each during the same period.

The report indicates that with the exception of Abu Dhabi-which saw a 11% increase in ADR-experienced rate compression and a level all other markets in the UAE dropped in occupancy in Q1 of 2019. AFC Asian Cup, hosted in the UAE at the beginning of 2019, was a catalyst for the impressive ADR levels achieved by the hotels in Abu Dhabi.

The UAE is expected to witness the opening of an additional 6,500 hotel keys by the end of the year.

On the other hand, Saudi Arabia’s Dammam and Khobar experienced an improvement in occupancy of 11% in Q1 of 2019, building on the 2018 performance.

“This trend is expected to continue throughout the year. The Riyadh hotel market has increased by approximately 2,100 keys between Q1 of 2018 and 2019, placing increased competitive pressure on rates,” said the report.

Diversely, for Kuwait City, Bahrain’s Manama, Oman’s Muscat, and Jordan’s Amman, the report indicates that of Q1 of 2019, all of the respective markets, with exception of Manama, registered a decline in y-o-y in revenues per available room (RevPAR).

Furthermore, according to the report in the period between Q1 of 2018 and Q1 of 2019, over 800 keys entered into the respective markets. This resulted in a 4% y-o-y increase in supply. Of note, in Q1 of 2019, the confirmed openings were the Hilton Garden Inn in Muscat (232 keys) and the Hyatt Regency in Kuwait City (200 keys).

Returning international visitation to key Jordanian markets in 2019 looks to be a watershed moment for tourism in Jordan. Petra, a key attraction in Jordan, is expected to receive a record number of visitors in 2019.

Other key highlights mentioned in the report include that Alphabet has released its latest product, addressing the hospitality industry with the roll out of the Google Hotels.  The platform provides multiple price points akin to established metasearch engines such as Trivago. From a hotelier’s perspective, this may increase the portion of direct bookings a property receives. However, the report indicates that the hotels are more exposed to location and price shopping behaviour by guests.

Additionally, the report cites that more lifestyle brands are to enter the Saudi Arabian market such as Canopy by Hilton and Voco by IHG.

These brands aim to capture the growing millennial demographic, which is expected to become the largest source of hotel demand globally in the next decade.

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