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Middle East and Africa Market Update Q2 2015 from STR Global

Spotlight Middle East & Africa – Constant Currency

Market performance – Occupancy, ADR and RevPAR, June 2015 YTD, USD

A focus on the Middle East & Africa’s performance 

The Middle East & Africa region reported a +0.6% increase (USD Constant Currency**) in revenue per available room (RevPAR), achieving USD 104.76 for the first half of 2015. The increase was driven by ADR (+1.1%) while Occ declined (-0.5%).

 

MEA 12 Month Moving Average 

ADR and Occ, Jan 2013 – June 2015, USD, Constant Currency

Middle East & Africa Class Comparison 

June 2015 YTD, Occ, ADR and RevPAR, USD, Constant Currency

June 2015 YTD Occupancy, ADR & RevPAR percentage change in USD

Occupancy

ADR (FX*)

RevPAR (FX)

ADR (CC**)

RevPAR (CC)

Middle East

-2.9

-1.4

-4.4

-1.2

-4.1

Northern Africa

6.2

-2.9

+3.2

+10.0

+16.8

Southern Africa

-1.3

-8.3

-9.4

+3.7

+2.4

*FX = Foreign Exchange Rate, **CC = Constant Currency

When eliminating the exchange rate impact towards USD, and calculating ADR on a constant currency basis, Southern Africa closed the second quarter with positive RevPAR growth (+2.4%), driven by ADR (+3.7%) while Occ declined (-1.3%). 

Northern Africa holds the region’s stand-out RevPAR performance for H1 2015 (+16.8%). This strong growth was driven by both Occ (+6.2%) and ADR (+10.0%). Coming from a lower base in 2014, the Northern African subcontinent showed a strong recovery trend; however, the trend is seeing a slow-down compared to Q1, as levels are slowly balancing previous year’s performance.

Despite the Middle East having the smallest percentage increase, RevPAR still dominates the region at USD 146.12. Supply has been outpacing demand in Q2, reporting +4.6% and   -0.5% respectively. Demand in this region was lower, as Ramadan moved from July 2014 into June. 

***Constant Currency is an exchange rate that eliminates the effect of exchange rate fluctuations.

Middle East & Africa Countries Occ, ADR % Change

June 2015 YTD, in Local Currency

 

2015 Q1 Snapshot – Middle East & Africa:

  • Jordan - The country has seen an impact in performance as a result of the Syria situation. There is a large amount of refugees entering the country. Overall performance for Jordan is declining for the month June as well as YTD 2015 with a double digit decline in RevPAR. This trend is mainly driven by a loss of Occ opportunity for the country, which is YTD performing below a level of 50%.
  • Qatar recorded positive ADR increase in the first two quarters of the year (+10.8% YTD). Occupancy declined in the second quarter (-6%); the performance declines in Qatar coincide with Ramadan. On the positive side, group demand has been increasing strongly with double digit growth in the first half a year of 2015. As the country’s long term strategy – National Vision 2030 – major projects to improve the infrastructure are planned. Supply has been growing strong (+4.3%) in Q2.
  • Saudi Arabia, the second quarter of the year outperformed Q1 in terms of ADR growth (+11.2%), especially the markets Makkah and Medina have shown outstanding results during Ramadan, due to pilgrimage. 
  • Dubai Occupancy in the Emirate remained at 42.1% throughout Ramadan, unaffected by the year to date (YTD) increase of +6.2% in supply and RevPAR saw a small drop from AED245 to AED228 during the Ramadan period.  
  • Kuwait has been showing a strong first and second quarter in terms of Demand with +14% and +8.1% respectively. Supply growth was particular strong in the second quarter (+4.8%). 
  • Nigeria experienced a -4.1% decrease in demand in Q2. However, inflation levels pushed ADR in the country up +10.2%.
  • South Africa reported a +0.2% increase in occupancy to 60.6% YTD, but ADR (+6.0% to ZAR1,076.20) and RevPAR (+6.2% to ZAR652.00) each increased. Overall, Q1 had a slightly higher RevPAR growth (+6.7) compared to Q1. 
  • Supply, demand and pipeline growth have all remained slowed in South Africa due to economic performance. 
  • Egypt recorded another extremely strong quarter with a RevPAR increase of +36.4%. The recovery trend is continuing, however, it has been slowing down compared to the first quarter of 2014, which still had RevPAR increase of 61.1%. Occupancy has been growing steadily in the first half of 2015, with group demand coming back into the country.

All ADR and RevPAR figures measured in local currencies.

Top 5 pipeline countries 

In Construction Pipeline, June 2015 Report

Changes to markets

As part of our bi-annual market mapping exercise, we are going to review and revise the structure of some markets and submarkets with July 2015 processing. This includes the allocation of individual hotels to new / different markets and submarkets, where applicable. We do this to ensure minimum disruption to your data sets whilst providing the best industry data available as the sample grows and markets evolve. Several markets will reflect these changes with the July data release. Participants in those regions will be notified in a separate communication.

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