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Middle East hotel rates fall 3.2 per cent

The drop was accompanied by a 3.3 per cent increase in room occupancy, to 69.1 per cent, according to HotStats
05/03/2018

Pictured: Hotels in Dubai saw a 1 per cent increase in room occupancy to 86.9 per cent accompanied by a 1.1 per cent decline in room rate to $272 (£196)

Hotels in the Middle East and Africa saw a 3.2 per cent year-on-year decline in average room rate in January to $182 (£135).

The drop was accompanied by a 3.3 per cent increase in room occupancy, to 69.1 per cent, according to the latest worldwide poll of full-service hotels from HotStats.

Pablo Alonso, CEO of HotStats, said: “Trading conditions for hotels in the Middle East and Africa have been very challenging in recent years as the oil crisis, which began in earnest in 2014, led to a reduction in energy trade-related demand as well as reduced government and private sector spending across the region.

“Following the crash, oil prices remained relatively low until the fourth quarter of 2017 when they surged to just above $64 per barrel, which had a positive knock-on effect on demand levels. This recovery seems to have continued into January; however, hotels in the region have a lot of ground to make up after several years of decline.”

Hotels in Dubai reflected the overall picture in the region, with a 1 per cent increase in room occupancy to 86.9 per cent accompanied by a 1.1 per cent decline in room rate to $272 (£196).

Sharm El Sheikh bucked the trend, recording growth in both room occupancy (11.8 per cent) and achieved average room rate (5.1 per cent). While revenue per available room (RevPAR) remained low at just $20 (£14) in the rolling 12-month average, it was the highest level recorded in this measure since the bombing of the Russian charter flight from the Egyptian resort to St Petersburg in October 2015.

Alonso said: “Whilst the Russian government gave permission for flights to Sharm El Sheikh to resume in January 2018, it is likely to be some time before tour operators are in a position to start bringing tourists back to the resort. Aeroflot will be one of the first to resume flights, which are scheduled to commence at the end of February.

“If, as hoped, other nations follow suit, it could be the catalyst for a significant recovery in revenue and profit performance for hotels in Sharm El Sheikh in 2018.”


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