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COVID-19 webinar summary: 5 key points on the Middle East and Africa (25 March)

As the impact of COVID-19 continues to affect hotel performance across the globe, the Middle East and Africa are no exception. At the time of writing, 52 hotel closures have been officially reported in the Middle East in addition to more than 1,200 in Africa. This is low, however, when compared to the just under 40,000 closings in Europe.

While many key global markets have reported occupancy declines exceeding 90%, Kuwait was the only Middle East market with an occupancy drop of more than 80% for the week ending 21 March. Others, meanwhile, have seen less severe decreases—such as Qatar (-30%) and the United Arab Emirates (-54%). To provide further insights, we’ve compiled five key findings from this 25 March MEA webinar.

Declines have escalated in recent weeks

On a weekly basis, since the week ending 16 February, key countries in the region have reported progressively worse year-over-year occupancy declines. Unsurprisingly, several key Middle East markets have produced significant decreases, and the latest data—week ending 21 March—highlights that occupancy has fallen to below 30% for the majority. It is also worth noting that the two worst-affected markets are both in Saudi Arabia, following the declines that began with the suspension of Umrah visas on 27 February.

MEA hotel occupancy dropped below 30% for majority of markets

Is Jeddah the only city in the world that’s driving average daily rate?

Possibly, yes. Jeddah reported a 24% lift in ADR for the week ending 21st March—making it the only key market in the region to achieve growth. How it is achieving this remains to be seen, but change of use could be a reason for the increase. On another note, Doha and Riyadh were the only markets to post single-digit ADR declines during that week—with decreases in the former having begun fairly recently.

Jeddah posted hotel ADR growth amid COVID-19 outbreak

Abu Dhabi is trending ahead of Dubai for the first time in a decade

A key reason is that Abu Dhabi’s downward curve began later than Dubai, as the market delivered two events before business closed down. The occupancy growth seen below was a result of the World Urban Forum and UMEX before the end of February, but with a limited number of flights coming into the country, there are unlikely to be any short-term increases.

Abu Dhabi's downward occupancy curve started later than Dubai

Jumeirah Palm & Beaches leading Dubai ADR

In terms of occupancy, STR’s nine Dubai submarkets reported levels ranging between 15% and 30% as of 22 March—with all markets following a similar decline trend. When it comes to ADR, however, Jumeirah Palm & Beaches has achieved rates above AED1,200—with its proportion of Luxury hotels a possible factor. Although, again, the rate of decline in percentage terms is comparable to other submarkets.

Jumeirah Palm & Beaches leading Dubai hotel ADR

What does Dubai’s future demand look like?

Our 9 March update for business on the books reported 11% forward demand for the next 365 days, at the time of writing, the picture looks a little worse. As of 23 March, the following year’s future demand sits at just 8.5%. However, Dubai is a market known for short pickup times, and it is worth keeping this in mind.

Dubai future demand for next 12 months

What about Africa insights?

A full article will be posted in the coming days. Please check back to our COVID-19 landing page, in particular, the Press Releases and Blogs section. Alternatively, you can watch a recording of the webinar.