Middle East enjoys highest hotel occupancy in the world for first half 2008

Aug 26, 08 | 1:57 am

By Maria Karam,

The global hotel market got off to a good start in 2008, driven by strong average room rate growth. Analysis by Deloitte Touche Tohmatsu shows that for the first six months of the year, North America was the only region not to record double-digit revenue per available room (revPAR) growth (in US dollars).

"Most regions have seen strong growth for the first six months of 2008, which is a great result for the industry given the current economic uncertainties facing the global economy," said Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality and Leisure at Deloitte.

RevPAR in the Middle East grew 21.6% to US$135. "The region also had the highest occupancy and average room rates in the world at 75.3% and US$180 respectively," said Rob O'Hanlon, Tourism, Hotel and Leisure partner at Deloitte Middle East.

RevPAR growth continues in Dubai, albeit at a slower pace than last year, up 9.6% to US$274. The Emirate also achieved the highest occupancy and average room rates of any city in the Middle East at 85.3% and US$321. Resorts in Egypt also reported strong revPAR growth, as the country becomes more popular with tourists due to the low price of luxury accommodation. Taba came out on top, with revPAR rising 93.2 percent. However, absolute revPAR in Taba is the lowest in the Middle East at US$27.

Central and South America had the highest growth of any region with revPAR rising 23.0% to US$82, driven by average room rate increases of 19.5%. The region is benefiting from the weak US Dollar, which is keeping US travellers close to home. Most cities have witnessed strong growth. 

In Europe, revPAR increased 15.2% to US$115. A number of European cities have reported strong growth for the first six months of the year despite the current economic slow down and the strength of the Euro's potential to deter visitor numbers from these countries. Hotels in Russia continue to report some of the highest revPAR results in Europe, with Moscow achieving a revPAR of US$268, up 25.1%. St Petersburg also witnessed strong growth, rising 37.1%.

Hotels in Asia Pacific reported a 13.3% growth in revPAR, reaching US$100. Improvements have been driven by increases in average room rates which now stand at US$147. Bali achieved the highest revPAR growth, 38.8% increase in revPAR to US$86.

North America, the world's largest branded hotel market, was the only region in the world not to achieve double-digit revPAR growth in the first six months of 2008. While occupancy dipped to 61.5%, average room rates grew 4.8% to US$109, a US$5 increase on the same period last year. Data from the US shows that there has been an increase in weekday demand and a drop in weekend demand suggesting that leisure travellers are curtailing their travel plans as the economic downturn eats into discretionary leisure spend

Commenting on the results, Alex Kyriakidis said: "The strength of some currencies against the US Dollar, notably the Euro, is presenting a challenge for the hotel industry, particularly in Europe which is likely to see a downturn in visitor numbers from the US and UK during the remainder of the year. The US will continue to benefit from an influx in both European and Asian travellers but the positive impact of inbound visitors is unlikely to offset the downward pressure as a result of the weakening economy. The Middle East looks set for a fifth consecutive year of double-digit growth, and Asia is also well placed to have another strong year."


Source: BusinessIntelligence Middle East