Monday, August 17, 2020

Saudi Arabia’s religious tourism market has been the hardest hit during the coronavirus pandemic, with Makkah and Madinah hotels seeing the sharpest declines in the Kingdom.

Colliers International’s MENA Hotels Quarterly Review looked at just how badly COVID-19 has set the Kingdom’s hospitality and tourism sector back. Though the Kingdom is set to benefit from its country-wide domestic tourism drive – Saudi Summers – it has still seen performance drop across the board.

Makkah was the hardest hit in the quarter, with RevPAR in its hotels crashing by 70 percent compared to H1 2019. In terms of ADR, Makkah saw a 46 percent YoY drop in 2020, with occupancy also dropping 45 percent in 2020 compared to the previous year.

Madinah followed a similar demand pattern, however, was able to retain its ADR, resulting in a YoY RevPAR decline of 44 percent in H1 2020. ADR for the Kingdom’s religious city was down by just 7 percent, though occupancy was down 40 percent.

Religious tourism tends to spike in Saudi Arabia around the Hajj season where Muslims set out on a pilgrimage to visit the faith’s most holy sites. This year, The Ministry of Hajj and Umrah announced it would limit the number of pilgrims performing Hajj to just 1,000 in Makkah to thwart the spread of the virus.

Ordinarily, Hajj brings in millions of Muslims who often use their life savings to fund the trip.

Commercial hubs, such as Riyadh and Dammam/Khobar, have fared better than leisure driven markets in H1 2020. Both occupancy and ADR recorded single-digit declines compared to H1 2019. This is in part due to a more lenient restriction applied to necessary business travel.

Riyadh saw ADR drop by just 3 percent and occupancy by 4 percent. Dammam/Khobar meanwhile saw ADR drop 2 percent and occupancy 4 percent.

Looking ahead, multiple properties have delayed their openings, resulting in an expected 57,000 keys in the major cities by FY 2020.

This is 4,900 keys fewer than expected in Q1 2020, said Colliers.

Source: https://www.hoteliermiddleeast.com/business/118963-religious-tourism-hardest-hit-for-saudi-hotel-market-colliers-report-says