Hotels & Hospitality Industry Updates Q4, 2014
Global hotel investment volumes reached US$40.4 billion during the first three quarters of 2014 – the highest year-to-date total since 2007 and a figure that will continue to benefit through to the end of the year and onto 2015.
According the “Hospitality 2015 Game Changers or Spectators” report from Deloitte, the continued economic growth of the emerging markets and a growing middle class with more disposable income, Q4 and 2015’s outlook seems a positive one, with India and China being likely to be key drivers during the term.
To read the full report click here.
Due to this, emphasis needs (and will) shift towards the mid-market and budget product for growing middle classes. The domestic traveller is expected to be the key driver of a sustainable hospitality growth in many of the largest hospitality markets. Nevertheless, branding will remain a pivotal issue for hotel industries to be mindful of.
Hotel occupancy rate in the Middle East/Africa region increased 3.6% to 62.8% during the first nine months of this year, according to data compiled by STR Global. Year-to-date, the region saw a 5.7% RevPAR growth.
The UAE remains as the country with the highest occupancy rate at 72.9% in September despite this being a small drop of 3.3% and 3.4% in ADR and REVPAR respectively.
Saudi Arabia was one of the MENA region’s strongest performers with Jeddah seeing a 14.7% increase in ADR followed by Cairo (12.7%) and Muscat with 11.8%. Cairo reported the largest occupancy increase jumping to 107.5% to 51.8%.
The GCC economies are well on their way to recovering from the global economic crissis and these figures are representative of that. With mega events such as the FIFA World Cup 2022 and Dubai World Expo 2020 they will act as the regions key growth drivers for the industry.
It seems the hospitality market is trending as a preferred destination for global fast food chains, driven by a growing population, influx of tourists and expats and a business friendly environment. The fast food market is accounting for 40% of the franchising market (currently $30B) with the UAE’s fast casual dining sector with $8.7B by 2015 and Saudi Arabia’s fast food market worth $4.5B by the same time.
American Fast Food chains such as Steak ‘n’ Shake, Dennys. Jamba Juice, and Sirio Maccioni all have plans to expand across to GCC nations in both Q4 and 2015.
New Hotels and Openings in the MENA market.
Millenium and COpthorne Hotels have announced plans to unveil their new-to-region hospitality brands with targets expecting a total of 50 properties by 2017. Abu Dhabi, Doha, Dubai, Al Khobar, Riyadh, and Jeddah have been identified as prime locations for the mid-market brands, with a total of six properties set to be signed/launched by 2017
Premier Inn, Hilton and Starwood all are underway with major projects across the entire middle east region.
A major opening in the UAE should see the Taj Dubai open in the fourth quarter, one of many projects expected to open due to this previously mentioned expansion.
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