Hotels take the brunt of the Arab Spring
Some GCC markets suffered from the impact of the Arab Spring
Click here to add Accor as an alert
Disable alert for Accor,
Click here to add AMMAN as an alert
Disable alert for AMMAN,
Click here to add Beirut as an alert
Disable alert for Beirut,
Click here to add Cairo as an alert
Disable alert for Cairo,
Click here to add Ceemea as an alert
Disable alert for Ceemea,
Click here to add Corinthia Hotels as an alert
Disable alert for Corinthia Hotels,
Click here to add Damascus as an alert
Disable alert for Damascus,
Click here to add Hilton Worldwide as an alert
Disable alert for Hilton Worldwide,
Click here to add Manama as an alert
Disable alert for Manama,
Click here to add Muscat as an alert
Disable alert for Muscat,
Click here to add Nenand Pacek as an alert
Disable alert for Nenand Pacek,
Click here to add Rudi Jagersbacher as an alert
Disable alert for Rudi Jagersbacher
More than a year after the popular risings across the Arab world changed the region's business outlook, hotel operators still believe in the investment potential of the Middle East, but expressed concern about the impact of rising Islamist parties on the tourism industry.
The strong tourism fundamentals of the region are still there and recovery is only a matter of time, according to a panel of experts at the Arabian Hotel Investment conference which addressed the Arab Spring impact as a major theme.
"The fundamentals are the same… Sinai is still a great place to go for diving and the fish have not gone away," said Paul Pisani, senior vice-president of hotels development at Corinthia Hotels. However, the rise of Islamist parties in countries such as Tunisia and Egypt is still a matter of concern for the tourism industry due to certain restrictions, members of the panel said.
During the conference, experts crunched the numbers for the tourism performance of Arab Spring countries and neighbouring countries experiencing a ripple effect. In the first quarter of 2012, hotel occupancy reached 40 percent in Cairo and 45 percent in Manama, according to STR Global figures.
In 2011, the situation was more dire. The year on year revpar (revenue per available room) change in 2011 compared to 2010 in Damascus was a drop of 62 percent, in Cairo 46 percent and in Bahrain 46 percent, according to the data.
Some GCC markets suffered from the impact of the Arab Spring. Year on year revpar change in 2011 compared to 2010 was 45 percent drop in Manama and 6.8 percent drop in Muscat. Lebanon and Beirut were indirectly hit by the crisis. Beirut had a 22 percent drop in revpar and Amman saw a nine percent drop in 2011.
In 2011, the Middle East was at 78 percent of its 2008 peak figures, according to STR Global data. Revpar in the Middle East increased 10.4 percent and only 1.6 percent in North Africa in the year to date in March. Occupancy rates in the Middle East reached 69 percent, Revpar was $149 and the average daily rate was $214 in the year to date in March.
The Arab Spring has not deterred major hotel operators from setting up new properties in these countries, with Hilton Worldwide and Accor group announcing new properties in some of these countries.
"The Arab Spring is one issue. A project takes three years. The Arab Spring happened only 13 months ago so many of the projects were already pre-signed before that. But when you look at the longevity of these projects, they're not short-term. You're talking 15-year returns on investments from a time point of view. So things will happen in between in different places," said Rudi Jagersbacher, Hilton Worldwide President for the Middle East and Africa.
Growth in the MENA region will be driven by the oil-exporting economies, sustained by high oil prices and government spending in 2012, according to Nenand Pacek, co-founder of Ceemea business group.
- Will terror attacks damper Arabs' appetite for European holidays?
- Nip, tuck: Dubai's grand plans for being a major player in medical tourism
- Eleven month after bomb attack, Turkish Air resumes flights to Sharm El-Sheikh
- Saudi poised to become new leader in theme park industry
- Bahrain begins large overpass project near new building developments