MENA Tourism and Hospitality – Q3 2014 | Aranca Special Reports

MENA Tourism and Hospitality Report
Theme: Green Tourism
Q3 2014
aranca.com

Table Table of Contents
01. MENA Tourism Synopsis .............................................................................................. 1
02. Hospitality Market Update ........................................................................................ 2
03. Kuwait Tourism Industry .............................................................................................. 6
04. Theme: Green Tourism ............................................................................................... 8

MENA Tourism and Hospitality Report – Q3 2014
1
Connect with us:
01
MENA Tourism Synopsis
The number of tourist arrivals in MENA’s tourism industry is projected to grow 4.4% to 149 million by 2030, resulting in an increased share in the global tourism industry
MENA TOURISM & HOSPITALITY
According to the United Nations’ World Tourism Organization (UNWTO) Tourism Report 2014, the number of international arrivals to the Middle East is forecast to more than double from 61 million in 2010 to 149 million by 2030. Consequently, the Middle East’s share in international tourism is expected to grow from 6% in 2010 to 8% in 2030.
In Q3 2014, the performance of the hospitality sector in the MENA region improved. Occupancy rates gradually increased from 49.3% in July to 65.5% in September 2014. However, ADR decreased from $156.54 in July to $145.12 in September. Despite the decline in ADR, robust growth in occupancy levels caused RevPAR to expand from $77.15 in July to $94.99 in September 2014. Specifically, hospitality indicators rose substantially in Egypt, driven by improvement in security and the social environment. This enabled the hospitality market to regain confidence, boosted by the enhanced environment for the country’s tourism industry.
In October 2014, the UAE’s General Civil Aviation Authority (GCAA) signed an open skies agreement with the Government of Sierra Leone to allow an indefinite number of designated airlines to perform scheduled air services between the two countries. This agreement is anticipated to boost trade, tourism, and investment between the UAE and Africa. The UAE already has air services agreements with 164 countries, including 87 open skies agreements.
In October 2014, Oman launched cruise season 2014–15 with the arrival of the Seabourn Odyssey at Muscat. The country is expected to receive 300,000 cruise tourists and 134 port calls during the next eight months.
The Government of Dubai plans to become a leading global medical tourism hub, targeting 500,000 tourists a year and revenue of Dh2.6 billion by 2020.
The Saudi Commission for Tourism and Antiquities (SCTA) collaborated with farm owners in the Riyadh province and granted them agro-tourism membership licenses, to develop the sub- segment in the Kingdom. This niche tourism theme is forecast to boost the tourism sector by transforming sustainable farming into a source of revenue and employment generation.

2
Connect with us:
02
Hospitality Market Update12
The hotel industry in the Middle East & Africa (MEA) reported positive performance in Q3 2014. Despite ADR declining from $156.54 in July to $145.12 in September, steady growth in occupancy rates from 49.3% in July to 65.5% in September caused RevPAR to increase from $77.15 in July to $94.99 in September 2014
OCCUPANCY RATE
PERFORMANCE IN JULY
In July 2014, visitor demand in Cairo (Egypt) increased, boosting occupancy rates by 12.5 pps1 to 29.3% compared with the same period last year. Although occupancy levels were below those in 2013, growth in performance levels during previous months is a positive sign and indicates the market is scheduled to achieve performance levels exceeding those in 2013.
Occupancy Doha (Qatar) improved by 5.5 pps2 to 47.6%, driven by increased regional leisure tourist demand.
Abu Dhabi (UAE)’s overall occupancy levels stood strong at 50.3%2 in July 2014, boosted by robust regional visitor demand.
Occupancy rates in Riyadh (KSA) fell slightly by 0.3 pps2 in July 2014. The month of Ramadan has historically resulted in substantially lower levels of demand and July was no exception, with the overall market achieving an average occupancy of 38.3%. In contrast, Makkah and Medina (KSA) witnessed an influx of travelers during Ramadan, with more than 20%1 occupancy growth in both markets.
Dubai (UAE)’s occupancy levels declined 4.6 pps2 to 50.3% in July 2014. Hotels in Dubai were impacted by the collective effect of the annual deceleration in summer and the occurrence of Ramadan throughout the month.
Occupancy rates in Amman (Jordan) decreased 8.7 pps1 to 34.4%, reporting the largest decline the occupancy metric in the region.
PERFORMANCE IN AUGUST
In August 2014, Cairo (Egypt) reported the largest increase in occupancy rates of 37.8 pps1 to 58.8%, driven a rise in hotel demand. Hotels in Cairo welcomed the largest number of guests in August than in any other period since the protests in the country intensified.
1 STR Global Data, Middle East/Africa Hotel Sector Performance for July, August, September 2014
2 HotStats MENA Chain Hotels Review (Only Four and Five Star Hotels)

3
Connect with us:
Riyadh (KSA) experienced the second largest growth in occupancy rates of 12.5 pps1 to 48.3% in August 2014. The conclusion of Ramadan led to resumption of corporate activity, which improved demand in the city. Furthermore, several local and regional conferences and events resulted in an increase in corporate tourist inflows.
Demand in Jeddah’s hotel market increased, with occupancy rates growing 6.8 pps2 to 77.0%. Jeddah’s popularity as a premier leisure destination in the Kingdom continues to drive strong levels of domestic leisure travelers to the city, especially during the Eid Al Fitr holiday and summer school holidays.
Hotels in Kuwait experienced weakening market conditions, as occupancy declined by 1.5 pps2 to 35.6% in August 2014. Due to the absence of any distinct leisure or retail attractions in Kuwait, hotels struggled to capture a suitable share in the leisure segment from domestic and regional markets during the summer holidays. The lack of diversification of Kuwait’s leisure attractions significantly impacts the market during the summer months as corporate activity slows and residents travel abroad to other destinations in the region and globally.
Occupancy in Doha (Qatar) increased 13.3 pps2 to 59.9%, largely due to the influx of leisure travelers, who benefitted from the remaining summer and Eid holidays that extended into August for certain GCC nations. This trend is positive for the realization of the National Tourism Strategy 2030, which aims to diversify its demand base to include a greater proportion of regional travelers through the development of cultural assets and family-based leisure attractions.
Abu Dhabi (UAE)’s hotel market continued to improve performance levels as occupancy rose 7.5 pps2 to 71.3%. The culmination of Ramadan and Eid Holidays in the beginning of August enabled hotels in Abu Dhabi to attract a robust number of regional travelers to the city’s entertainment and shopping attractions. Furthermore, the Tourism and Cultural Authority (TCA)’s proactive approach to promote the destination in emerging markets, particularly China, resulted in a 189% increase in room nights purchased by Chinese visitors in the first six months of 2014 vis-à-vis the same period in 2013.
PERFORMANCE IN SEPTEMBER
Occupancy in Sharm El Sheikh (Egypt) increased the most, by 43.5 pps2 to 77.7%, in September 2014. Efforts undertaken by prominent travel associations and tour operators to attract visitors to the Red Sea destination boosted occupancy rates.
In September 2014, Cairo (Egypt)’s occupancy rates expanded 26.8 pps1 to 51.8%. Improvement in security and the social environment helped the market regain confidence.
Occupancy rates in Abu Dhabi (UAE) increased 6.6 pps2 to 76.6%. The upward trajectory in occupancy rates is forecast to continue during the next couple of months as the city prepares for high season, with notable events such as the Formula 1 Abu Dhabi Grand Prix and the opening of the much-anticipated Yas Mall scheduled in November.
Jeddah (KSA)’s occupancy rates rose 2.3 pps2 to 85.9%, predominantly driven by the lack of new hotels entering the city and increased proliferation of demand particularly in the corporate and conferencing segments. Demand is anticipated to remain strong as numerous infrastructure and mixed-use projects are under development in the city.
Occupancy levels in Dubai (UAE) increased 2.1 pps2 to 78.2% in September 2014 as the market returned to business after the summer.

4
Connect with us:
AVERAGE DAILY RATE (ADR)
PERFORMANCE IN JULY
In July 2014, Jeddah (KSA) was the region’s only market to report a double-digit increase in ADR (up 12.5%1 to $286.28). Abu Dhabi (UAE) followed, with 5.1% growth to $114.10 due to a shift in hoteliers’ yield strategies in response to robust overall occupancy levels. Average rates in Abu Dhabi’s market have declined steadily since August 2011; however, this trend has started to reverse, with hotels’ ADRs gradually rising during the first five months of 2014, fuelled by strong regional visitor demand. This is expected to continue through 2014, especially as hoteliers prepare for peak season.
ADRs in Dubai (UAE) increased 1.1%2 to $202.94 in July 2014.
Cairo (Egypt)’s hotel market experienced an increase of 1.0%2 to $114.85, with the new political situation providing market stability.
Hotels in Doha (Qatar) recorded a marginal increase of 0.7%2 in ADR to $201.56 in July 2014.
ADRs in Riyadh (KSA) decreased the most by 4.8%1 to $207.05 in July 2014.
In August 2014, Cairo (Egypt)’s ADR grew the most by 8.6%1 to $108.29. Political stability boosted demand, enabling hoteliers to adopt more progressive pricing strategies. The Ministry of Tourism’s promotional campaign, launched in July to attract tourists to the country, benefitted hotels and is expected to improve tourism demand in the coming months.
ADRs Jeddah (KSA) rose 8.4%2 to $296.64 in August 2014, driven by increased demand.
Doha (Qatar) registered a decline of 3.0%2 in ADR to $215.61 in August 2014. Furthermore, Kuwait’s ADRs decrease 3.8%2 to $261.54. The lack of diversification in Kuwait’s leisure attractions adversely impacted the market during the summer months.
ADRs in Dubai (UAE) decreased 5.6%1 to $181.83 in August 2014. Eid celebrations shifted from August to July this year, causing Dubai hotels to experience a decline in hotel performance in August 2014.
In September 2014, four markets recorded ADR increases exceeding 10%. ADRs in Sharm El Sheikh (Egypt) expanded the most, by 18.2%2 to $50.39 in September 2014, whereas those in Cairo (Egypt) improved 12.7%1 to $107.86. The relative stability in Egypt in recent months was reflected in the performance of hotel markets across the country.
Jeddah (KSA)’s ADRs advanced 14.7%1 to $269.52 in September 2014. The city continues to lead as one of the region’s high-growth hospitality markets, with robust gains in performance levels.
ADRs in Muscat (Oman) improved 11.8%1 to $205.72 in September 2014.
Dubai (UAE) reported a rare decline in ADR of 3.2%2 to $231.36 during the month, whereas Riyadh (KSA)’s ADRs fell to $236.33 in September due to increased competition in the industry.

5
Connect with us:
REVENUE PER AVAILABLE ROOM (REVPAR)
PERFORMANCE IN JULY
Two markets experienced RevPAR growth exceeding 15.0% in July 2014. Cairo (Egypt)’s RevPAR increased 82.6%1 to $30.57, driven by improved occupancy rates, coupled with a rise in ADR. RevPAR in Manama (Bahrain) advanced 20.1%1 to $72.94 in July 2014.
Amman (Jordan)’s RevPAR declined 21.4%1 in July 2014 to $54.86, posting the largest decrease in the region, primarily impacted by lower occupancy rates.
In August 2014, four markets reported RevPAR growth of more than 20.0%. Cairo (Egypt)’s RevPAR increased by $42.81 to $63.65, whereas that of Riyadh (KSA) rose 28.7%1 to $103.45, driven by higher occupancy rates, coupled with stronger ADR.
RevPAR in Manama (Bahrain) sustained stable growth over the previous month, increasing 24.1%1 to $110.52, whereas Jeddah (KSA)’s RevPAR improved 21.2%1 to $206.23, driven by higher occupancy rates and ADR in August 2014.
The continued recovery in Egypt’s political scenario resulted in increased occupancy rates and stronger ADR. The improved performance levels helped Sharm El Sheikh record the largest RevPAR growth of $24.62 to $39.15 vis-à-vis the same period last year. Cairo’s RevPAR also rose by $31.91 to $55.82 during September 2014.
RevPAR in Jeddah (KSA) and Abu Dhabi (UAE) increase 21.9%1 and 14.0%2 to $216.34 and $98.76, respectively, driven higher occupancy rates and ADR.
Doha (Qatar)’s RevPAR increased 12.2%1 to $127.50 in September 2014.
Despite a decline in ADR level, RevPAR in Riyadh (KSA) increased 7.6%2 over 2013 to $163.45, as Riyadh hotels returned to business after the summer months.
RevPAR in Dubai (UAE) decreased 0.5%2 to $180.88, driven by lower ADRs in September 2014.
Table 1: Statistics in key MENA countries3
Occupancy
ADR
Q-o-Q change
Country
Jul–Sep 2014
Jul–Sep 2013
Jul–Sep 2014
Jul–Sep 2013
Occupancy (pps)
ADR (%)
Egypt 57.5%
32.6% EGP514.3
EGP429.3
24.9
19.8%
Saudi Arabia 59.9%
51.1% SAR946.4
SAR916.7
8.7
3.2%
UAE 63.5%
63.7% AED567.2
AED578.6
(0.3)
(2.0%)
3 STR Global Data, Middle East/Africa Hotel Sector Performance for July, August, September 2014, Aranca Analysis
Denotes increase in parameter
Denotes decrease in parameter

6
Connect with us:
03
Kuwait Tourism Industry4
Kuwait’s tourism industry is witnessing a significant increase, with international tourist arrivals projected to reach 0.4 million by 2024. Transport infrastructure developments and fast-tracked tourism projects are expected to position Kuwait as a tourist destination.
 International tourist arrivals to increase to 440,000 by 2024: In 2014, Kuwait’s travel and tourism industry ranked 70th worldwide, in terms of absolute contribution to GDP. The World Travel & Tourism Council (WTTC) forecasts the number of international tourists visiting Kuwait to reach 440,000 by 2024 from 270,000 in 2014, with revenues expanding at a CAGR of 4.0% to KWD236.6 million during 2014–24.
 Direct contribution to GDP to reach KWD882.7 million by 2024: The travel and tourism industry’s direct contribution to GDP is projected to increase at a CAGR of 6.3% to KWD1,482 million (1.8% of GDP) by 2024 from KWD758.3 (1.5% of GDP) in 2014.
 Leisure tourism comprises major share: In 2014, inbound and domestic tourists spent KWD1,350.4 million on travel & tourism. Leisure tourism contributed the majority (77% or KWD1,040.2 million) to spending, whereas business travel accounted for the remainder (23% or KWD310.2 million).
 Leisure spending to grow faster than business spending: Leisure travel spending is anticipated to increase 12.2% y-o-y to KWD1,167.2 million in 2014 and subsequently rise at a CAGR of 6.5% to KWD2,194.1 million by 2024. In contrast, spending on business travel is anticipated to grow 8.9% y-o-y to KWD337.7 million in 2014 and expand at a slower CAGR of 5.4% to KWD574.1 million by 2024.
 Investment in travel & tourism industry to improve 5.6% in 2014–24: Capital investments in travel & tourism are estimated to grow 17.3% y-o-y to KWD192.4 million in 2014. During 2014–24, investments would expand at a CAGR of 5.6% to KWD330.9 million.
 Infrastructure development to stimulate growth: The Government has developed a long-term national plan to attract tourists and investments to the tourism sector.
o An amount of $13 billion was allocated to transport infrastructure.
4 WTTC and Desk Research

7
Connect with us:
o A new airport terminal, scheduled to be completed in 2016, is expected to triple the airport’s annual capacity to 20 million passengers.
o The under-construction Kuwait Metro System, spanning 160 kms (69 stations), and the Kuwait National Rail Road System, an integrated rail network covering 511 kms, are also forecast to enable Kuwait to better facilitate domestic and regional travel.
 Saudi Arabia, key to tourism sector: Saudi Arabia’s easy access to Kuwait makes it a key source market for the country’s travel and tourism industry. Both countries share a symbiotic partnership; Saudis prefer to visit Kuwait for short holidays and Kuwaitis travel to KSA for Hajj and Umrah. Furthermore, KSA is Kuwait’s major business partner and visa requirements between the countries were eliminated to facilitate tourism flows.
 Tourism projects fast-tracked on top priority: As part of the five-year tourism development plan, Kuwait’s Government aims to attract one million tourists annually by 2015.
o Tourism development specialists, such as the Kuwait Touristic Enterprises Company (TEC), are launching various entertainment and sports projects worth $460 million.
o The supply of rooms is forecast to increase by almost a third, with nearly 10,000 new rooms scheduled to be available by 2015.
o Several four and five star resorts are set to open by 2015, including projects under the InterContinental Hotel Group and the Jumeirah Messilah Beach Hotel and Spa.
o The Government plans to develop Failaka Island and Boubyan Island into leisure tourism destinations as priority projects.
 Kuwait International Fair, 2014-15: The Kuwait International Fair (KIF), the country’s largest and most established exhibition centre, held from October 2014 to October 2015, is staging 44 events (27 specialist trade exhibitions and 17 consumer shows) and is set to boost the tourism sector. Events range from mega events in the construction industry (Big 5 Kuwait and CityScape) to consumer events (The International Shopping Exhibition and Family Expo) and trade shows (The Kuwait International Property Show, Kuwait Oil Company Annual Exhibition, the 13th International Gold and Jewellery Exhibition and Kuwait Travel Market).

8
Connect with us:
04
Theme: Green Tourism5
Green tourism in the Middle East is increasingly gaining importance as more countries become eco-conscious. The UAE is the region’s eco-tourism hub; however, other countries, such as Egypt and Jordan, are gradually moving toward eco-tourism
 Eco-travelers constitute over 1/10th of leisure tourists in the Middle East: Green tourism or Eco-tourism is low-impact tourism that involves traveling into natural environments that responsibly protect the area’s nature and culture. According to an ecotourism survey conducted by Market Vision, a Dubai-based tourism research specialist, eco- travelers account for more than one-tenth of the Middle East’s leisure travelling population in 2013. Eco tourism is gaining prominence in the Middle East and has significant potential for growth as more tourists are becoming eco-conscious.
 UAE, the preferred destination for eco-tourism: The environment and tourism sectors are two of the emirate’s four key sectors identified as major growth areas.
o UAE leads the eco-tourism initiative in the MENA region and is implementing various eco-tourism projects, such as Kalba Eco-tourism project, the Sir Bu Nuair Island project, Al Jabal Resort, The Chedi Khorfakkan, and Al Majaz Waterfront. Furthermore, Abu Dhabi’s latest attraction is eco-boat cruises, also known as Eco Donuts.
o The UAE Green Festival, the first international event of its kind in the emirate, is aimed at highlighting the importance of preserving the environment and developing sustainable green practices. The festival, in accordance with UAE Vision 2021, took place from March 16 to April 16, 2014. It comprised several initiatives such as green hotels, green restaurants, and various events, including an eco-friendly fashion show, the Green Auto Show, and the Green Jobs Fair.
o The Dubai Department of Tourism and Commerce Marketing (DTCM) launched the ‘Think Green’ initiative to promote the concept of green economy in the emirate through seminars and workshops and improve service standards in the green tourism industry. Through this initiative, the DTCM successfully reduced the level of carbon-dioxide emissions generated by the tourism industry by 20% in 2012. Dubai currently has more than 576 green
5 Desk Research

9
Connect with us:
teams in hotels and more than 1,500 tourism industry professionals trained under this program.
 Green tourism in Egypt: Egypt currently spends EGP 100 billion per annum (~20% of its overall budget) on energy subsidies. The Egyptian Minister of Tourism signed a protocol with the Egyptian Hotels Association and the Solar Energy Development Association in May 2013, effective one year after signing the protocol, to provide 100,000 Red Sea hotel rooms with solar energy for five years, to reduce the consumption of non- renewable energy. This initiative is forecast to result in a 30% reduction in hotels’ electricity bills and save the country EGP 164 million in energy subsidies. Furthermore, the Tourism Minister plans to expand the green initiative along the Nile to combat pollution to the river.
 El Gouna, MENA’s first carbon neutral city: El Gouna, a resort city on Egypt’s Red Sea Riviera, is set to become MENA’s first carbon neutral city. This project is an initiative taken by the government to achieve a significant breakthrough in green tourism, enhance Egypt’s global image, and attract tourism projects. El Gouna is already titled Egypt’s most environment-friendly vacation destination and was chosen as the location for the Green Star Hotel Initiative (GSHI). Priority projects include conservation of natural resources, such as clean beaches and marine life, which support the nation’s eco-tourism market.
 Eco-tourism in Jordan: The Royal Society for the Conservation of Nature and USAID bolstered the increase in ecotourism in Jordan and currently oversee 10 protected eco-tourism sites. Revenue from eco-tourism increased 10% y-o-y to JD831,336 in 2012. There is substantial future potential and the industry is forecast to generate 50,000 jobs in the next 10 years.
 Eco-tourism in Bahrain: Manama was declared the Asian Capital of Tourism 2014 and has been the Capital of Asian Culture for the last three successive years. The Bahrain Ministry of Culture initiated a Tourism Strategy 2015–18, which necessitates an ‘experience-led’ approach to drive eco-tourism. Eco-tourism activities include cultural attractions, such pearl diving explorations, coupled with nature trails and stays at eco- lodges. Furthermore, the ministry aims to position the Hawar Islands, a unique eco- system that draws thousands of tourists annually, as an eco-tourism destination.
 Eco-tourism in Oman: The Regional Office for West Asia is working with the Sultanate of Oman’s Ministry of Tourism to strengthen the ecotourism sector. Two coastal areas were selected as eco-tourism sites: Bandar al Khayran and Wadi Darbat. Turtle and whale watching and desert camping are the major attractions of this eco-tourism initiative.
 Green tourism in Saudi Arabia: According to the World Tourism Organization, desert tourism is the newest frontier in eco-tourism. The Saudi Commission for Tourism and Antiquities (SCTA) aims to transform Saudi deserts into eco-tourism areas. Furthermore, a Saudi native woman has created various green tours and was licensed in 2014 to operate tours in Makkah, Jeddah, and Taif for eight years.

10
Connect with us:
Disclaimer:
This material is exclusive property of Aranca. The information, opinions, estimates, and forecasts contained in this report have been determined or obtained from public sources believed to be reliable and in good faith. Aranca has not independently verified these data and makes no assertion as to its accuracy, reliability, or completeness. Aranca will not be held liable under any circumstances for any direct or indirect loss or damage suffered as a result of the use of this information. This newsletter is intended for the personal use of qualified users and not for broader distribution. No part of this presentation may be used or shared, modified or reproduced in any format without explicit written permission of Aranca.
© 2014, ARANCA. All rights reserved.
AMERICAS
275 Madison Avenue, 4th Floor, New York, NY 10016
T: +1 212 878 8826
M: +1 646 824 4312
EUROPE
93-95 Gloucester Place, London W1U 6JQ
T: +44 (0) 207 487 8214
GCC, AFRICA, ASIA & AUSTRALIA
Floor 2, Wing-B, Supreme Business Park, Hiranandani Gardens, Powai, Mumbai 400 076
T: +91 (22) 3937 9999
GLOBAL CLIENT SUPPORT
T: +1-212-995-5890

MENA Tourism and Hospitality – Q3 2014 | Aranca Special Reports

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Ähnlich wie MENA Tourism and Hospitality – Q3 2014 | Aranca Special Reports

Ähnlich wie MENA Tourism and Hospitality – Q3 2014 | Aranca Special Reports (20)

Mehr von Aranca

Mehr von Aranca (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

MENA Tourism and Hospitality – Q3 2014 | Aranca Special Reports