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Middle East and Africa Market Update Q3 2015

Middle East and Africa Market Update Q3 2015 from STR Global

Spotlight Middle East & Africa – Constant Currency

RevPAR, September 2015 YTD, USD, Constant Currency

A focus on the Middle East & Africa’s performance 

The Middle East & Africa region reported a +2.9% increase (USD Constant Currency**) in revenue per available room (RevPAR), achieving USD 99.93 for September 2015 year to date. The increase was driven by both ADR (+2.3%) and Occ (+0.6%).


Middle East Development

12MMA ADR and Occ, Jan 2013 – Sep 2015, USD, Constant Currency

September 2015 YTD Occupancy, ADR & RevPAR percentage change in USD

*FX = Foreign Exchange Rate, **CC = Constant Currency

When eliminating the exchange rate impact towards USD, and calculating ADR on a constant currency basis, Southern Africa closed the third quarter with positive RevPAR growth (+4.4%), driven by ADR (+4.6%) while Occ declined slightly (-0.2%). 

Northern Africa holds the region’s stand-out RevPAR performance for September 2015 YTD (+13.7%). This strong growth was driven by both Occ (+3.4%) and ADR (+9.9%). Coming from a lower base in 2014, the Northern African subcontinent showed a strong recovery trend; however, the trend is seeing a slow-down compared to Q1, as levels are slowly balancing previous year’s performance.

Despite the Middle East having a slight performance decline, RevPAR still dominates the region at USD 130.85. Supply has been outpacing demand in Q3, reporting +4.9% and   +4.2% respectively. Ramadan impacted the performance of Q3, the festivity started on 18th June 2015 and went until 16thy July. Eid-al-Ahad moved from October 2014 to September.

***Constant Currency is an exchange rate that eliminates the effect of exchange rate fluctuations.

Middle East & Africa Class Comparison 

September 2015 YTD, Occ, ADR and RevPAR, USD, Constant Currency

Middle East & Africa Countries Occ, ADR % Change

September 2015 YTD, in Local Currency

2015 Q3 Snapshot – Middle East & Africa:

Bahrain reported a 7.8% increase in occupancy to 59.3% in September as well as double-digit growth in ADR (+18.2% to BHD90.98) and RevPAR (+27.4% to BHD53.96). The upswing in year-over-year performance came as a result of an earlier Eid al-Adha. Demand growth (+19.8%) outpaced supply growth (+11.2%), and hotels capitalized with higher rates. 

Jordan saw occupancy drop 1.1% to 53.9% in September. However, ADR (+3.8% to JOD109.94) and RevPAR (+2.6% to JOD59.21) each increased. Jordan’s hotel industry has been affected by political unrest in the region. International arrivals in the country are declining for the third consecutive year with Middle Eastern and European tourists accounting for a vast portion of the decrease. The slight upswing in September ADR and RevPAR came as a result of Eid al-Adha. The YTD RevPAR growth has declined 15.6% compared to the same period in 2014.

Mauritius, the third quarter recorded a significant performance increase (RevPAR +19.5%) compared to the first half of 2015, which declined by 1.3%. September increased in occupancy (+16.8% to 75.7%) and RevPAR (+24.8% to MUR3,408.62). ADR in the country was up 6.8% to MUR4,505.18. Supply remained flat for the month, while demand surged 16.8% due to an influx of international arrivals from Europe and Asia. 

Johannesburg, South Africa, saw a 4.7% increase in occupancy to 63.2%, a 7.8% rise in ADR to ZAR859.66 and a 12.9% increase in RevPAR to ZAR543.48. Year-to-date ADR growth (+10.8%) continues to drive performance in the market, while a high supply growth rate has affected absolute occupancy.  

Cairo, Egypt, posted double-digit increases in each of the three key performance metrics in Q3 . Occupancy increased 14.7% to 53.2%; ADR was up 13.1% to EGP869.62; and RevPAR rose 29.7% to EGP462.88. The performance to the return of international visitors to Egypt after the political unrest of late 2013 and early 2014. Travel resulting from Eid al-Adha also aided performance in the market.

Lagos, Nigeria, reported double-digit growth across the three key performance measurements for the month September: occupancy (+17.6% to 45.5%); ADR (+16.5% to NGN44,633.18); and RevPAR (+37.1% to NGN20,324.11). Performance in Lagos has fluctuated throughout the year, and September performance was driven by an unbalance in demand growth (+22.6%) and supply (+4.2%). Year-to-date KPIs remain more modest in Lagos. 

All ADR and RevPAR figures measured in local currencies.

Top 5 pipeline countries 

In Construction Pipeline, September 2015 Report