Middle East and Africa hotel sector both a threat and an opportunity


Euromonitor International Travel and Tourism Industry Analyst Nadejda Popova revealed to delegates at the World Travel Market Vision Conference-Dubai that new hotel development in the region has slowed as a result of the global downturn. However, the United Arab Emirates, Saudi Arabia, Egypt, Qatar, and Jordan all have more than 3,000 rooms each in the pipeline based on research by STR Global.

The hotel sector in the Middle East and Africa is both a threat and opportunity for the region’s tourism industry, revealed the new research.

Asian hotel chains such as Dusit, Shangri-La, Banyan Tree, and Anantara are contributing to the expansion, all opening properties in the United Arab Emirates, Egypt, and Oman. Popova told delegates – at the conference hosted at World Travel Market’s sister event Arabian Travel Market – budget hotels were also expanding, with Accor leading the way, opening four Ibis-branded hotels by 2012.

However, oversupply is also an issue, with Abu Dhabi and Dubai the most exposed.

“Although arrival numbers are growing in these cities, supply is outpacing demand, resulting in lower than expected occupancy rates and RevPAR figures,” Popova said.

Popova also pointed out the Middle East benefits from some of the highest RevPAR data worldwide, and “may be undergoing a small structural change post-crisis as the luxury price proposition corrects itself.”

The region’s strong airline sector will also benefit tourism as a whole. Qatar will host the FIFA World Cup 2022, which Euromonitor International sees as another opportunity.

On the downside, as well as oversupply of rooms, Euromonitor International has concerns that the civil and political unrest may spread. Increasing oil prices will also impact the region’s tourism industry.

World Travel Market Exhibition Director Simon Press said: “The Middle East and Africa are now an integral part of the global travel and tourism industry, “The region’s inbound tourism numbers are growing, but hotels need to balance the expected increase in demand with the number of rooms available.”