STR: Middle East and Africa hotel performance for Q1 2018
Key Q1 Takeaways:
- Egypt posts best Q1 occupancy since 2010
- South Africa off to slow start in 2018; water crisis affects Cape Town performance
- United Arab Emirates registers higher occupancy, lower rates
STR’s sample comprises more than 59,000 hotels and 8.0 million hotel rooms around the globe. Contact email@example.com for additional market data.
Hotels in the Middle East reported mixed Q1 2018 performance results, while hotels in Africa posted growth across the three key performance metrics, according to data from STR.
U.S. dollar constant currency, Q1 2018 vs. Q1 2017
- Occupancy: +0.9 percent to 70.6 percent
- Average daily rate (ADR): -4.5 percent to US$163.76
- Revenue per available room (RevPAR): -3.7 percent to US$115.62
- Occupancy: +5.2 percent to 58.9 percent
- Average daily rate (ADR): +6.6 percent to US$125.18
- Revenue per available room (RevPAR): +12.1 percent to US$73.73
Local currency, Q1 2018 vs. Q1 2017
- Occupancy: +21.2 percent to 60.1 percent
- Average daily rate (ADR): +11.8 percent to EGP1,291.72
- Revenue per available room (RevPAR): +35.5 percent to EGP775.69
Performance recovery continued in Egypt, and the absolute occupancy level was the highest for a first quarter in the country since 2010. The year-over-year RevPAR increase was supported by both the Sharm El Sheikh (+84.9 percent) and Cairo/Giza (+14.7 percent) markets, and STR analysts expect this boost to continue as Russia recently resumed flights to Egypt after a two-year suspension.
- Occupancy: -3.3 percent to 63.1 percent
- ADR: +2.6 percent to ZAR1,361.30
- RevPAR: -0.7 percent to ZAR858.99
STR analysts note that the slow start to the year for South Africa was in part due to supply growth (+2.2 percent). A recent analysis from STR showed that supply growth in the Luxury segment is levelling off. At the market-level, Cape Town reported an 8.9 percent Q1 decrease in occupancy. That decline was steeper in March specifically (-12.3 percent). STR analysts believe that the negative performance was influenced by the water crisis in the city. The announcement of “day zero” would have likely deterred international tourists, who would have had to book trips multiple months in advance. Johannesburg, on the other hand, saw a 2.5 percent increase in occupancy for the quarter. That, coupled with a 5.1 percent lift in ADR, pushed the market’s RevPAR growth to 7.8 percent.
United Arab Emirates
- Occupancy: +1.1 to 83.4 percent
- ADR: -3.4 percent to AED666.48
- RevPAR: -2.3 percent to AED556.12
Healthy demand growth (+5.2 percent) was enough to outpace continued significant supply growth (+4.0 percent) in the emirates, leading to an increase in occupancy while mitigating the supply impact on rate levels. Key markets Abu Dhabi (RevPAR: -4.0 percent) and Dubai (RevPAR: -2.6 percent) each saw overall performance declines. STR analysts note that the supply growth impact is more substantial in Dubai ahead of Expo 2020, while Abu Dhabi is looking to diversify away from its oil dependence and focus on more development in the tourism sector.