Middle East hotel market to remain “constrained” for 2019

Hotel analysts Tri Consulting has predicted “mixed results” for the Middle East hospitality sector in its hotel market report for 2019.

The Middle East hotel market is set for further pressures in 2019
The Middle East hotel market is set for further pressures in 2019

Hotel analysts Tri Consulting has predicted “mixed results” for the Middle East hospitality sector in its hotel market report for 2019.

According to the report, regional performance levels for 2018 experienced a challenging year, which was driven by supply progression and minimal growth in demand.

Low oil prices, weaker economic growth and currency fluctuations were among the reasons for lower tourist spending in the Middle East, which also resulted in a drop in average room rates by 4.1% to $171.1bn. This also led to RevPar falling 1.9% to $116.5bn.

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In terms of market outlook, Tri Consulting flagged up Dubai and the Kingdom of Saudi Arabia as “noticeable markets” that are expected to slowdown in demand.

“As the global GDP growth is forecast to remain flat and the region is expected to see a marginal uptake in 2019, we expect the market conditions to remain constrained and hotel performance levels to remain under pressure this year,” it said in the report.

Other results show that overnight tourism arrivals to the region had experienced a 10% hike in 2018 compared to 2017. This led to a rise in occupancy levels from 66.5% to 68.1%.

The corporate, BAR and leisure markets were the key sources of demand for the region’s hotels. The report also found that Online Travel Agency’s (OTA’s) had witnessed a surge in demand.

Hotelier Middle East recently interviewed World Hotels president Dimitris Argirakis at the Blockchain Technology Summit at Dubai’s World Trade Centre, who urged tourists to book directly through hotels rather than OTA’s.

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