Almost half-way through the first quarter of 2022, there is a general sense of optimism in the key markets within the MENA region regarding the recovery of the hotel sector from the effects of the global pandemic.
Over the past two years, the hotel and hospitality sectors were amongst the hardest hit industries, due to national mandates enforced in most locations to curb the spread of COVID-19. In many cases, this saw the partial or full closure of hotels, with many still operating on a reduced capacity basis.
As travel restrictions in key markets continue to ease, we expect that occupancy rates in hotels will rise over the course of the next year. This, however, may be counterbalanced by wavering consumer confidence regarding the Omicron variant, the latest analysis from Colliers shows.
MARKET TO STABLIBISE IN 2022
According to data sourced from the Colliers Hotels’ database, STR Global and local statistics centres, 2022 will see relatively high hotel occupancy rates across 24 submarkets in key MENA hospitality markets.
With 2021 marking the recovery phase from the global pandemic for the hotel sector, it is expected that the year ahead will see the stabilisation of the market, with most key markets recording little change in occupancy rates from the previous year.
Rising 0.7%, Fujairah is forecasted to see the greatest increase in occupancy rates in 2022, while Alexandria experiences the largest decrease, at -4.4%.
UAE
Across eight key markets in the UAE, occupancy rates for 2022 are expected to average 70.5%, an increase of 7% from the previous year.
A key driver of this increase is likely to be EXPO 2020, which since its launch in October 2021 has attracted millions of visitors and workers to Dubai and has led to a surge in property sale and rental prices throughout the emirate.
With the Qatar FIFA World Cup 2022 taking place between November – December, hotels can expect to benefit from an overspill in demand as visitors opt to stay in the popular transit locations of Dubai and Abu Dhabi.
The location which is projected to see the greatest occupancy levels is Dubai Marina / JBR (79%), in contrast to Abu Dhabi Beach which at 60% is the lowest.
KSA
A more modest increase, occupancy rates in the KSA are expected to rise by 0.8% this year as compared to 2021.
The most popular area, at 65% occupancy, will be Riyadh, increasing from 56% in 2021. Hosting large events such as Riyadh Season in Q4 of 2022 along with an increased emphasis on international commerce in the city will be a likely driver of this growth.
EGYPT
Across four key markets in Egypt, occupancy rates are forecasted to be considerably higher than those in 2021.
Colliers expect that in Cairo, occupancy in 2022 will be at 69%, compared to 41% the year before. This may be down to new attractions appearing in the city such as the new Grand Egyptian Museum opening in November 2022, which will attract visitors and boost tourism.
Other popular tourist locations such as Sharm El Sheikh and Hurghada, favoured for their access to the Red Sea will see increased visitation rates, which in turn will raise hotel occupancy levels.
QATAR
At 74%, Doha is expected to sustain the high levels of demand that it recorded over the past two years throughout 2022.
Further growth is projected towards the end of the year with the FIFA World Cup 2022 drawing more visitors to the country and driving up short-term occupancy demand.
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