The EY Middle East Hotel Benchmark Survey highlights a flourishing hospitality scene

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In May 2023, the Middle East’s hospitality industry witnessed noteworthy shifts and trends, unveiling the dynamic landscape of the region’s tourism and hotel sectors. The latest findings from the EY Middle East Hotel Benchmark Survey provide valuable insights into key cities’ performance during this period.

Cairo’s hospitality market experienced a remarkable surge in revenue per available room (RevPAR), soaring by an impressive 85.4 percent from USD 62 in May 2022 to USD 114 in May 2023. This boost can be attributed to a 3.8 percentage point increase in occupancy and a substantial 76.4 percent rise in the average daily rate (ADR), from USD 82 to USD 145. The launch of the “In Egypt, your expectations are history” campaign, in collaboration with Middle East and North Africa’s (MENA) online travel marketplace Wego, and the return of Chinese travelers after the lifting of Covid-19 travel restrictions may have contributed to this growth.

Riyadh’s hospitality sector showed remarkable progress, with an impressive 16.2 percentage point increase in occupancy, rising from 52.7 percent in May 2022 to 68.9 percent in May 2023. Coupled with a 3.7 percent ADR increase in May 2023 compared to May 2022, this led to a notable 35.6 percent growth in RevPAR, from USD 90 to USD 122. The launch of the “Riyadh Travel Fair (RTF) 2023” and the opening of the luxurious entertainment destination “Via Riyadh” significantly contributed to Riyadh’s hospitality sector performance. With strategic partnerships and the introduction of campaigns like “Rethink Summer,” the city’s hospitality sector is poised for continued growth.

Kuwait experienced stability in occupancy levels but saw a decrease in ADR by 32.9 percent, from USD 254 in May 2022 to USD 171 in May 2023, resulting in a 32.8 percent drop in RevPAR, from USD 149 to USD 100. Reduced business activity due to OPEC’s oil production cuts, a relatively quiet MICE calendar and heavy reliance on business travelers contributed to this weakened performance. However, the upcoming holidays, collaborative agreements and proposals for unified visas among GCC countries offer exciting opportunities for Kuwait’s hospitality sector.

Manama’s hospitality market faced challenges, with a 24.4 percent drop in RevPAR from USD 106 in May 2022 to USD 80 in May 2023. A 4 percentage point decrease in occupancy and an 18.8 percent reduction in ADR, from USD 181 to USD 147 during the same period, contributed to this decline. Initiatives by Bahrain Tourism and Exhibitions Authority (BETA) to promote the country in Japan, in partnership with airlines, are expected to improve Manama’s hospitality sector performance in the long run. The launch of a “Schengen-style” visa for GCC countries and the hosting of various events provide potential avenues for growth.

Abu Dhabi
Abu Dhabi’s hospitality sector demonstrated resilience, boasting a 9.2 percentage point increase in occupancy in May 2023 compared to May 2022, and a 5.7 percent ADR growth from USD 81 to USD 86 over the same period. This resulted in a robust 18.6 percent growth in RevPAR, from USD 61 to USD 73. The opening of “SeaWorld Yas Island” and strategic campaigns contributed to this performance. Upcoming staycation deals, events and anticipated visits from Chinese tourists are expected to further boost Abu Dhabi’s hospitality sector.

Dubai’s hospitality market experienced a 2.7 percent growth in RevPAR, increasing from USD 209 in May 2022 to USD 215 in May 2023. Despite a 6.8 percent ADR decrease, from USD 273 to USD 254 in May 2023, the remarkable 7.9 percentage point growth in occupancy during this period drove the RevPAR growth. The city’s participation in global events, coupled with promotional campaigns and festivities, played a significant role in this growth. Upcoming events, such as sports, entertainment and holiday seasons, are expected to sustain Dubai’s hospitality sector growth in the months ahead.

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