Strong first half growth for industry

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Several hotel closures have driven occupancy and rates up for many Omani hoteliers.

The Middle East hotel industry has recorded RevPAR growth of 13.7% for the first half of 2006, according to results from the HotelBenchmark Survey by Deloitte, with the region on track to record its fourth consecutive year of double-digit growth.

RevPAR increased US $17 to $108, placing the Middle East's performance above the Asia Pacific region ($97) and Europe ($100).

HotelBenchmark executive director Lorna Clarke said the growth had slowed compared to last year, but was still impressive.

"The level of investment in the region continues to astound," she said.

"In the first quarter of 2007 alone, $2 billion is reported to have been pumped into the hotel sector. Given the continued investment, strong economic performance and the media attention the region commands, it's not hard to see why the Middle East has the highest RevPAR in the world."

Among the first half results were some impressive figures for hoteliers in cities across the region, with Muscat boasting RevPAR growth of 54.8% to $164, and Riyadh hoteliers recording growth of 40.3% to $170.

In absolute values, Dubai recorded the highest RevPAR of $255 - a 16.4% improvement on the same period last year - while hoteliers in Luxor had the lowest RevPAR result of $24, a 13.4% improvement on last year.

The two losers in terms of RevPAR were Doha, with a 3.6% drop to $179, and Beirut, where RevPAR plummeted 53.6% to $39.

TRI Hospitality Consulting managing consultant Emma Davey said Muscat's performance was driven by an acute lack of room supply.

"The renovations at the Al Bustan Palace and the Sheraton, plus the recent closure of The Chedi as a result of storm damage from Gonu, have driven the first half results," she said.

"Riyadh and Abu Dhabi have performed well, because both markets are strongly driven by the corporate segment and have benefited from strong oil prices driving business investment. In both locations there is a lack of supply of quality hotel rooms, plus the InterContinental in Abu Dhabi was closed for renovation - it has now re-opened - so occupancy is strong, with prices rising."

Hotels in Damascus were benefiting from the country's more open and competitive economic policy, with higher corporate demand driven by increased liquidity and encouragement for foreign investment - particularly for tourism infrastructure - Davey explained.

Doha underperformed in the first half due to increased room supply, brought online for the Asian Games, waiting for business infrastructure to support ongoing performance, she said.

Deloitte Middle East tourism, hospitality and leisure partner Rob O'Hanlon said the region's industry continued to benefit from "increased airline capacity, events and new attractions".

"Infrastructure developments and effective marketing campaigns are also all helping to raise the profile of the region worldwide," he said. "With this in mind, we expect hotels across the region to continue to reap rewards."

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