Saudi Arabia's Jeddah and the UAE's Dubai proved to be the best Middle East hotel investment locations during the first 11 months of 2012, according to data supplied by global accountancy firm Ernst and Young (E&Y).
Using data supplied by E&Y, the coastal city of Jeddah was the top location for hotel investors, with some of the highest levels of average room occupancy in the Middle East and fast growing average room rates and yields. Jeddah is often used as a gateway for Muslim pilgrims travelling on to the Islamic holy city of Makkah for the hajj.
“Saudi Arabia experienced noticeable increases in occupancy rates, with Jeddah increasing by seven percent year-to-date, and Madina increasing two percent year-to-date. Compared to November 2011, Riyadh’s occupancy rate increased by 17 percent in November 2012, which was accredited to the various initiatives undertaken by the city to showcase lost artifacts and the introduction of new cultural experiences to the city,” the E&Y report said.
Dominating the top of the list was Dubai, which has seen growing confidence in the city and a rise in the number of hotel rooms coming on stream. Around 3,600 extra rooms were added in 2012, according to a report by real estate consultancy firm Jones Lang LaSalle (JLL). This is set to continue into 2013, with a further 5,200 hotel rooms expected to come on stream.
“The overall occupancy rate in Dubai was at 80 percent year-to-date, rising two per cent from same period of last year… The increase is attributed to the high number of forums and conferences from the banking and finance sector, securities sector and the oil and gas sector held in Dubai during the month of November. This represents Dubai’s increasing appeal as a business-friendly environment that continues to attract major investments and international projects in addition to the stable and increasing tourism sector within the city,” said Yousef Wahbeh, MENA Head of Transaction Real Estate at E&Y.
The report said the improved climate in the UAE and increased political stability in the region was set to continue into 2013, especially with the onset of the Dubai Shopping Festival throughout January.