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The Middle East is in a better position than much of the rest of the world when it comes to hotel room occupancy amid the global slowdown, an industry expert has said.
Despite current figures being lower than in previous years, the Middle East was showing a projected two percent rise in international tourist arrivals which compared favourably with a global reduction of two percent, said Robert O'Hanlon of Deloitte.
Using latest data supplied by STR Global, Middle East RevPAR (revenue per available room) - a key measure of hotel performance - was recording rates of $148 against Europe's $96 and North America's $68.
"RevPAR is an excellent way of determining the sentiment and turning points to assess the direction of the overall market," he said. "The shape of the curve is absolutely critical in showing the timings of when the markets turn into negative or positive growth."
He added: "If you look at the curve of the graph for Riyadh it is still increasing and showing strong growth, which is forecasted to continue increasing for the first quarter of this year. And this growth is reflected in other cities across the kingdom, reflecting the government's willingness to support the travel industry and the increasing appetite of Saudis themselves to travel within their country; and not just to the top-end five-star hotels, but also the mid-level market too."
He said across the Middle East, the seasonally adjusted figures showed an increase in RevPAR of 7.7 percent at the end of March 2009 compared with a year ago.
"There is stress in occupancies, but growth on the revenue side. Compare that with a number of European gateway cities and the graph goes negative. So in this region we have a number of areas that have very solid activity going forward," O'Hanlon added.
Regarding the performance of Dubai, O'Hanlon said it had experienced pain which was clearly shown by the figures.
"The key is to understand that in the first quarter of 2009, there was an accelerated drop in Dubai's RevPAR. In 13 out of the last 14 months, occupancy levels have been under strain. But, occupancy is still over 70 percent and a number of hoteliers around the world would love to see occupancies of this level."
Dubai is projected to have an additional 13,250 rooms by the end of 2009 with a further 10,208 planned for the following year.
O'Hanlon added: "This could throw up some real challenges, especially for unbranded properties and I would not be surprised to see some of the large chains consolidating with some of the unknowns to take advantage of their brands."
