Moving towards the end of 2021, it has been observed that several markets in the Middle East & North Africa’s hospitality industry are building on recovery that began in Q4 2020.
Ongoing monitoring of the Covid-19 pandemic by government entities and other key touristic stakeholders has had a significant impact on how markets open and close, according to data sourced from the Colliers Hotels’ database.
Colliers is a leader in commercial real estate services, with over 18,000 professionals operating in 67 countries.
Although travel restrictions in key markets are easing, based on a constant monitoring of Covid-19 cases, a controlled and consistent approach to recovery and growth is key to improving on hospitality performance in the short- and medium-term.
Any forecast is subject to a degree of uncertainty; the pandemic has introduced a higher level for the hospitality industry. Data was also sourced from STR Global and local statistics centres.
The forecast for 2022 incorporates at least five years of seasonality and market trends for each market and applies exponential smoothing to determine the likely trend for the coming year.
This is then weighted against the entry of new supply, upcoming mega events and government-led intervention to derive the expected occupancy level for the market in 2022.
Considering the potential impact of Covid-19 on hotel performance, this publication has been prepared by Colliers, providing 2021 and 2022 hotel occupancy forecasts for 24 sub-markets in key MENA hospitality markets.
UAE: The impact of Expo 2021 is expected to have a positive impact on all markets in the UAE, while the FIFA World Cup Qatar 2022 is expected to result in overspill demand to the key transit hubs in Dubai and Abu Dhabi.
Provided Sharjah continues to over-achieve its historical performance, it is expected to attain an occupancy of 70 per cent in 2022.
Saudi Arabia: Riyadh, Khobar and Jeddah have retained a fair share of demand in 2020 despite the travel restrictions as domestic demand addressed the shortfall of international demand. The continued emphasis on domestic demand, and the additional efforts from the Ministry of Tourism in the Kingdom are expected to result in a further growth in demand with both Riyadh and Khobar expected to exceed 2019 levels of demand.
Early indicators for a return of sustained demand for the Holy City are positive, with the potential for significant improvement.
Egypt: The return of the Russian market to Egypt in 2021 marks the return of an important feeder market and will have a pronounced affect on the Red Sea destinations of Sharm El Sheikh and Hurghada, which are both expected to exceed 2019 levels of performance in 2022.
Qatar: Doha has maintained a high level of demand across the year. And is expected to exceed 2019 levels of demand in 2021, with further improvement expected in 2022 with the FIFA World Cup expected to be a key driver in the final quarter of the year.
Other markets: The key cities of Muscat and Manama face continued travel restrictions which have ensured a more measured pace of demand recovery while markets such as Kuwait City with tighter restrictions are experiencing a slower recovery.
