COVID-19 webinar summary: 5 key points on the Middle East and Africa, 9 April
As COVID-19 continues to cause global hotel performance declines, we provided an update on the Middle East and Africa and have summarized the top five points here.
Middle East occupancy and ADR have declined significantly
The Middle East has faced average daily rate (ADR) challenges for a number of years now, following the oil crash of 2014 and continued hotel supply growth. COVID-19 has essentially accelerated declines in both rate and occupancy, and the effect has been felt in key markets across the region.
Jeddah and Doha report year-over-year ADR growth
Some regions have been more resilient than others, however, and data for the week ending 5 April shows ADR growth in two markets. In previous webinars, we discussed the increases in Jeddah, and this has now been joined by Doha, which reported a 5% year-over-year increase for that week.
An update on Dubai’s business on the books
Forward STAR data for Dubai presents a picture of notable short-term declines in business on the books and slight increases in pickup as we look further into the year. The below image compares where future demand was on 4 March against where it sits on 6 April, and further insights are provided in the full webinar recording—including updates on Expo 2020 and Eid.
Q1 data reports significant occupancy declines in Northern Africa
Hotel performance data for March year to date shows the extent of Northern Africa’s occupancy declines, as it reached an absolute level of 47%, which represents a 22.7% decrease on the previous year. With a marginal ADR drop of 1.4%, when reporting in US$, occupancy has been the key driver of the region’s 23.8% RevPAR decline.
Sub-Saharan Africa, however, has been less affected
With Northern Africa being affected by COVID-19 cases earlier, and Sub-Saharan Africa less dependent on international tourism, it is unsurprising that the latter was less affected. Sub-Saharan Africa reported a 15% decline in occupancy and slight increase in ADR (+3.6%) in Q1 to produce a more muted 12% decrease in RevPAR. Again, this is when reporting in US$.
Despite resisting declines until mid-March, occupancy decreases have been more notable since lockdown measures were introduced. As the image shows below, occupancy levels have decreased by almost 90%, as of the week ending 5 April.