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STR: Middle East and Africa hotel performance for Q2 2016, June 2016

July 30, 2016 Hotel Trends No Comments Email Email

Hotels in the Middle East reported negative results, while hotels in Africa reported mixed results in the three key performance metrics when reported in U.S. dollar constant currency, according to Q2 2016 data from STR.

Compared with Q2 2015, the Middle East reported a 5.5% decrease in occupancy to 62.9%. Average daily rate for the quarter was down 3.0% to US$169.99. Revenue per available room dropped 8.3% to US$107.01.

Africa experienced an 8.5% decrease in occupancy to 52.1%. Average daily rate was up 8.3% to US$101.61. RevPAR dipped 1.0% to US$52.92.

Performance of featured countries for Q2 2016 (local currency, year-over-year comparisons):

Nigeria reported negative results in each of the three key performance metrics. Occupancy dipped 4.0% to 44.8%, ADR was down 2.3% to NGN44,544.12 and RevPAR fell 6.3% to NGN19,939.74. The absolute occupancy level was the lowest for any second quarter on record in the country. Specifically in June, occupancy dropped 13.8% to 44.1% as supply growth (+3.3%) significantly outweighed demand performance (-10.9%).

Saudi Arabia experienced nearly flat occupancy (-0.5% to 64.8%), but a double-digit rise in ADR (+14.2% to SAR816.60) drove a double-digit increase in RevPAR (+13.6% to SAR528.86). Thanks to strong performance during Ramadan, the absolute ADR and RevPAR levels were the highest on record for a second quarter in Saudi Arabia. ADR in June was up 40.7% to SAR1,239.28, and RevPAR increased 44.4% to SAR780.27. STR analysts note that Makkah and Medina were the only two major hotel markets in the Middle East to experience year-over-year RevPAR growth during Ramadan.

South Africa posted increases across the three key performance metrics: occupancy (+5.1% to 60.6%), ADR (+7.5% to SAR1,097.71) and RevPAR (+13.0% to SAR665.48). The absolute ADR and RevPAR levels were the highest for any second quarter in South Africa. In June, RevPAR increased 7.0% to SAR596.50, marking the 59th consecutive month with year-over-year RevPAR growth in the country.

Performance of featured markets for Q2 2016 (local currency, year-over-year comparisons):

Cairo, Egypt, saw mostly flat occupancy (+0.2% to 55.5%) but double-digit increases in ADR (+24.9% to EGP980.94) and RevPAR (+25.2% to EGP544.33). April and May carried performance for the quarter. April was the first time on record in Cairo that ADR eclipsed EGP1,000.00, and May was the first month with occupancy above 70% since November 2010. According to STR analysts, that performance is consistent with the visit of Saudi Arabia’s King Salman and the investment deals that were signed during that time. On the other hand, June produced a 28.3% drop in occupancy to 35.2% and a 24.3% decline in RevPAR to EGP291.47.

Manama, Bahrain, reported decreases in each of the three key performance metrics. Occupancy dipped 4.0% to 48.9%; ADR dropped 4.9% to BHD73.01; and RevPAR fell 8.7% to BHD35.71. Overall results for the quarter were significantly affected by Ramadan and a 29.5% decrease in June occupancy to 32.4%. The previous five months of the year had produced year-over-year occupancy growth in the market.

Casablanca, Morocco, experienced decreases in occupancy (-11.4% to 60.7%) and RevPAR (-3.9% to MAD660.34). ADR rose 8.4% to MAD1,088.40. June significantly altered overall performance of the quarter with a 33.3% decline in occupancy to 42.4%—the lowest June occupancy on record in the market.

Middle East and Africa performance for June 2016 (U.S. dollar constant currency, year-over-year comparisons):

The Middle East and Africa each reported mixed results when compared with June 2015.

The Middle East reported a 16.3% decrease in occupancy to 48.9%. ADR for the month was up 12.5% to US$184.69. RevPAR fell 5.9% to US$90.25.

Africa experienced a 16.6% decrease in occupancy to 44.4%. ADR was up 4.4% to US$94.69. RevPAR fell 12.9% to US$42.09.

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