Saudi tops 2017 list of most expensive hotels in MENA

Saudi Arabia topped the list of highest average daily room rates in the Middle East and North Africa (MENA) for 2017, consultancy firm EY said in a new report.

Average room rates in Makkah rose by 4.5 percent year-on-year to $300 from $287 per day, the highest in the region.  Room rates in Jeddah, Riyadh and Madinah declined to $266, $166 and $213, respectively, it added.

Occupancy levels in 2017 rose by nearly 2 percent year-on-year (YoY) in Makkah to 49.1 percent and in Madinah by 0.2 percent YoY to 60.7 percent. Jeddah and Riyadh saw the occupancy falling to 63.7 percent and 55.5 percent, respectively.

Revenue per available room (RevPAR) in Makkah went up by 8.7 percent to $147 in 2017 versus the previous year. Riyadh and Jeddah saw RevPAR falling by 14 percent each, while Madinah declined by 7 percent.

“In Saudi Arabia, government initiatives have paved the way for increased leisure tourism from both international and domestic markets,” said Yousef Wahbah, MENA real estate, hospitality and construction sector leader at EY.   

“In the short term, hospitality demand in the Kingdom will be boosted by corporate travellers, tasked with helping deliver some of these mega-developments throughout the Kingdom,” he added.

Overall, the MENA hospitality market witnessed marginal growth in 2017, the report said.

Occupancy levels in Dubai hospitality market fell to 77.7 percent from 79.1 percent in 2016, while average room rates declined by 4.4 percent to $243 as new supply increased.

In Abu Dhabi, occupancy levels rose to 77.1 percent last year, spurred by events such as the Abu Dhabi Food Festival and the New Year’s Countdown Village. Average daily room rate, however, declined by 5.3 percent to $120 in 2017.

Cairo’s hospitality market experienced a growth, reporting the highest increase in room yield compared to 2016 and a RevPAR of 77.7 percent, due to continued political stability in the country.

“The MENA hospitality sector may have seen marginal growth in 2017, but the announcement of several new hotels, government initiatives and the development of several mega projects will help drive tourism in 2018," Wahbah said.