Middle East Hotel Markets | Outlook, Trends and Opportunities, and Hotel Valuation Index
By Elie Younes and Bernard Forster
The strong trading performance of hotel markets in the Middle East in 2004 was followed in 2005 by skyrocketing double-digit growth. This was driven predominantly by growth in average room rate, in line with HVS International’s projections in last year’s survey. We estimate that in 2005 occupancy declined slightly on 2004, from 72% to approximately 71%. We estimate that average room rate grew by approximately 17-20%.
The strong trading performance of hotel markets in the Middle East in 2004 was followed in 2005 by skyrocketing double-digit growth. This was driven predominantly by growth in average room rate, in line with HVS International’s projections in last year’s survey. We estimate that in 2005 occupancy declined slightly on 2004, from 72% to approximately 71%. We estimate that average room rate grew by approximately 17-20%. The hotel markets in the region have historically been underpriced in comparison to other international markets (mainly those in the West). However, such a situation is coming to an end. A rigid pricing strategy was implemented simultaneously across the region in 2005, a move triggered by increased liquidity in the region and sustainable levels of demand. (Click below link to download this report).