MENA HOTELS

QUARTERLY
REVIEW
FULL YEAR | 2019
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CONTENTS
QUARTER 4 2019 | MENA
MENA Full Year Review | Colliers International

3 Colliers Quarterly Update

4 Kingdom of Saudi Arabia

Riyadh
Jeddah
Dammam/Khobar
Makkah
Madinah

5 United Arab Emirates

Dubai
Abu Dhabi
Sharjah
Ras Al Khaimah
Fujairah

6 Egypt
Cairo
Alexandria
Sharm El Sheikh
Hurghada

7 Kuwait City, Kuwait

7 Manama, Bahrain

7 Muscat, Oman

7 Amman, Jordan
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QUARTER 4 2019 | MENA

MENA Full Year Review | Colliers International
COLLIERS QUARTERLY UPDATE
SALAM AIR EXPANDS FLIGHTS TO SAUDI
ARABIA
Salam Air, is set to launch their 11th direct flight route in
the GCC and their 3rd in Saudi Arabia. This route further
improves the connectivity between the capital, Muscat,
and key commercial and leisure hubs in Saudi Arabia.

The tourism and hospitality industries in both countries

are expected to benefit from this initiative through
increased arrivals and the associated tourism spend.

UK LIFTS RESTRICTIONS ON SHARM EL-

SHEIKH AIRPORT AFTER 4 YEAR BAN
An estimated additional 300,000 British tourists are
expected in Sharm El Sheikh as direct flights from the
UK to the Sinai Peninsula resume after a 4-year
restriction.

The ban was lifted by the UK, following improved

security measures in effect in the airport of Sharm El
Sheikh and the surrounding areas. These include CCTV
coverage, GPS tracking and security presence.

RIYADH SEASON ATTRACTS OVER 7.6

MILLION VISITORS
According to the General Entertainment Authority, the
Riyadh Season festival attracted over 7.6 mn visitors
between October and December. Visitors arrived to the
Capital from across the kingdom, with headline events
such as BTS attracting international visitors.

Tourism and hospitality industries were positively

impacted by the event and has led to an increased
hospitality demand across hotels in Riyadh.

UAE ANNOUNCES 5-YEAR MULTIPLE

ENTRY VISA
The announcement of an upcoming 5-year multiple
entry visa comes in conjunction with UAE’s
preparations to host EXPO 2020 in Dubai.

The implementation of this visa is expected to boost

demand over the medium to long-term, increasing
economic activities across the UAE, specifically
increasing inbound arrivals traveling for the purpose of
visiting friends and relatives (VFR) and leisure.
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KINGDOM OF SAUDI ARABIA

QUARTER 4 2019 | MENA
MENA Full Year Review | Colliers International

The first year of Saudi Seasons has contributed to the additional 1.27 million room
nights sold in 2019 across the largest hospitality markets across the Kingdom.
Over 350,000 tourist visas were issued in the last quarter of 2019, representing the
latent demand for the leisure industry in KSA.

Key Performance Indicators (Year-on-Year Change) Highlights

The successful Saudi Seasons

initiative contributed to an additional
1.27 million guest nights across key
cities in the kingdom.

The leisure focused luxury market in

KSA is due to witness the arrival of
international ultra-luxury operator
Aman, with 4 upcoming properties
announced, three in Al Oula and one
in Diriyah.
Hotel Supply (No. of Branded Hotel Keys) FY 2019 is marked by 9% and 15%
improvements in occupancy levels in
83,400
74,600 both Riyadh and Al Khobar,
61,850 respectively. The Madinah market
50,900 has best retained it’s ADR, due to
47,850
limited new supply and continued
growth in demand in 2019.

Supply Outlook
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
The hospitality market in KSA is
expected to diversify its supply, by
Source: Colliers International
Note: Includes only branded hotel supply; takes into account potential cancellations and delays
improving hospitality offerings aimed
at the domestic leisure market.
Year–on-Year % Change in Supply
Hotels in the coming years are
expected to have a wider variety of
styles of service delivery.

The branded hospitality market in

KSA is expected to grow at a CAGR
of 18% from 2019 to 2022, with the
forthcoming pipeline in Makkah being
the largest contributor.
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QUARTER 4 2019 | MENA

MENA Full Year Review | Colliers International
UNITED ARAB EMIRATES
In the build up to Dubai Expo 2020, more than 8,900 branded supply entered UAE’s
hospitality market in 2019.
A 5% increase in visitor arrivals to Dubai in 2019 from the previous year has
included double digit growth from key source markets such as Oman and China.

Key Performance Indicators (Year-on-Year Change) Highlights

UAE’s hospitality market continued to

experience rate compression, with
Abu Dhabi experiencing the smallest
YoY change in ADR of -2%, across
the UAE markets in 2019.

UAE witnessed the opening of more

than 8,900 keys in 2019, the majority
(~93%) of which opened in Dubai.
2019 saw a 5% increase in visitor
arrivals to Dubai. Top source
Hotel Supply (No. of Branded Hotel Keys) markets such as Oman, China and
Philippines witnessed a double digit
128,400 growth, contributing to the overall
119,400
98,600 108,000 growth in arrivals.
89,700
India (Dubai’s largest source market)
experienced a slight decrease in
arrivals of 3% YoY in 2019.

FY 2018 FY 2019 FY 2020 FY2021 FY2022

Supply Outlook

The branded supply in UAE is

Source: Colliers International expected to cross 108,035 keys by
Note: Includes only branded hotel supply; takes into account potential cancellations and delays
the end of 2020. Ras al Khaimah and
Year–on-Year % Change in Supply Dubai are expected to undergo the a
largest increases of supply in the
emirates post-2020.

Leisure attractions are expanding in

the UAE with multiple openings
expected in 2020; The Museum of
the Future, Madame Tussauds, and
the Zombie Apocalypse Park are a
few of the new offerings.
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EGYPT
QUARTER 4 2019 | MENA
MENA Full Year Review | Colliers International

The Red Sea Resort markets continued to improve in 2019, although demand
growth increased at a lower rate, indicating a return to previous norms.
Russian and UK inbound visitors have not returned to their previous numbers,
though the future looks promising with the lift on the restrictions on UK direct flights
to key locations in Egypt, such as Sharm El-Sheikh.

Key Performance Indicators (Year-on-Year Change) Highlights

Alexandria’s growing popularity as a

Mediterranean destination is
evidenced by the markets ability to
achieve ever higher rates, recording
a 24% Y-o-Y growth in ADR for FY
2019. Alexandria’s market has
benefitted from demand that
traditionally travelled to the Red Sea,
as the market opens up, it will face
increased competitive pressure.

Hotel Supply (No. of Branded Hotel Keys) High growth markets, Sharm El
Sheikh and Hurghada have
87,400 90,300 experienced a lower rate of demand
81,200 81,900 84,800
growth in FY 2019. In part, due to the
liquidation of Thomas Cook; which
had grown its Egyptian market by
95% YoY in 2018 and served 21
million customers globally.

2018 2019 FY 2020 FY 2021 FY 2022

Supply Outlook

3,000 keys of new internationally

Source: Colliers International branded supply is expected to enter
Note: Includes only branded hotel supply; takes into account potential cancellations and delays
the Egyptian market in 2020. The
Year–on-Year % Change in Supply additional supply is concentrated in
the Red Sea markets, where over
2,000 keys are expected.
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KUWAIT CITY, MANAMA, MUSCAT,

QUARTER 4 2019 | MENA

MENA Full Year Review | Colliers International
AMMAN
A total of 1,088 keys opened in the respective markets by the end of 2019. Notably,
Manama experienced the smallest growth, of under 50 keys, in 2019. The key hotel
openings in 2019 included Swiss-Belboutique in Kuwait; Hilton Garden Inn and W
Hotel in Muscat; St. Regis in Amman; and The Merchant House in Manama.

Key Performance Indicators (Year-on-Year Change) Highlights

Following a very strong performance

in Q1 2019 and stable performance
in latter periods of the year; Manama
was the only market to register
RevPAR growth in 2019.

The trend in all four markets was of

an increasing price sensitivity,
placing downward pressure on the
ADR in 2019.This decline in average
rates was a result of increased
Hotel Supply (No. of Branded Hotel Keys) competitiveness among the markets,
and pressure from the additional
33,400
30,500 1,088 keys that opened in 2019.
27,500
23,200 24,200

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Supply Outlook

Given the announced supply, it is

Source: Colliers International expected that an additional 3,300
Note: Includes only branded hotel supply; takes into account potential cancellations and delays
keys are scheduled for opening in
Year–on-Year % Change in Supply 2020. It is important to note that this
projection assumes some delays
which often extend for 1 or 2 years.

By 2022, Muscat’s branded hotel

supply is expected to reach 10,600
keys.

Source: Colliers International

FOR MORE INFORMATION

Christopher Lund Saqib Jafri

Head of Hotels | MENA Region Associate Manager | Hotels MENA Region
+971 55 899 6110 +971 55 769 9797
Christopher.lund@colliers.com saqib.jafri@colliers.com

James Wrenn
Senior Manager | Hotels MENA Region
+971 55 736 6767
James.wrenn@colliers.com