Jeddah, Makkah, Madinah hotel occupancy increases

Sunday, August 5, 2018

RIYADH — Overall, the majority of the internationally branded four and five star hotels in the Middle East hospitality market witnessed a decline across occupancy, average room rate (ADR) and RevPAR in May 2018 when compared to May 2017. In terms of KPIs, Abu Dhabi maintained the highest occupancy for the month of May with a 76.6% occupancy rate. Saudi Arabia was the top performer across the other metrics with Jeddah recording the highest ADR of $351, resulting in the highest RevPAR of $259 in May 2018.

Due to Ramadan beginning in mid-May this year and the onset of the summer season, the overall decline in performance in the region is unsurprising.

Saudi Arabia, however, benefitted from the large influx of pilgrims during the holy month. Over two million pilgrims were expected to have visited the holy city, resulting in increased KPIs across Makkah, Madinah and Jeddah, with declines only in Riyadh.

Makkah saw an increase in occupancy by 7.3% points to 61.2% in May 2018 from 53.9% in May 2017. The city’s ADR increased by 41.3% from $165 to $233, which resulted in a growth in RevPAR by 60.4% from $89 in May 2017 to $143 in May 2018, both of which were the record highest increases across the region for the same period.

Madinah’s occupancy increased by 4.2% points from 63.8% in May 2017 to 68% in May 2018. It’s ADR increased by 11% from $178 to $198, resulting in an increase in RevPAR by 18.3% from $114 in May 2017 to $135 in May 2018.

Jeddah saw an increase in occupancy by 2.2% points to 73.7% in May 2018 from 71.5% in May 2017. The city also enjoyed a significant growth in ADR by 19.5%, up from $294 in May 2017 to $351 in May 2018. This led to an increase in RevPAR by 23.2%, up from $210 in May of last year to $259 in May of this year.

In the UAE, Abu Dhabi enjoyed the highest increase in occupancy percentage points within the region with 8.9% points, as well as the highest occupancy rate, which grew from 67.7% in May 2017 to 76.6% in May 2018. While the capital’s ADR decreased by 11.8% from $101 in May 2017 to $89 in May 2018, the city maintained its RevPAR of $68 from last year.

Dubai’s hospitality market witnessed a dip across all KPIs as a result of the peak season of events and conferences coming to a close. Its occupancy declined by 16.4% points from 77.3% in May 2017 to 60.9% in May 2018. ADR dropped by 0.7% from $238 to $236, resulting in a decline in RevPAR by 21.7% from $184 to $144 for the same period.

The MENA hospitality market will continue to see a drop in KPIs during the summer season as business travel declines and conferences and events are at a minimum.” — SG