MKG Hospitality reports that Germany based TUI remains number one hotel across MENA, followed by french Accor and UK InterContinental Hotels Group.
European based hotel groups retain their position as the largest in the Middle East & North Africa Region (MENA), according to a special report released by industry experts MKG Hospitality.
Germany based TUI retains its spot as the number one hotel group throughout the MENA region with almost 34,000 rooms, followed by French group Accor with over 22,000 rooms and the UK’s InterContinental Hotels Group (IHG) closely after. The largest market in terms of corporate chain supply, and largest pipeline growth, is yet again the UAE and Kingdom of Saudi Arabia (KSA). Turkey and Egypt are also both up there in terms of market size, whilst Qatar is making a strong push in terms of new developments, no doubt driven by its bid to host the FIFA World Cup, as well as dynamic business sector.
“Corporate hotel chains have great potential in the MENA region as they heavily revolve around new build properties in fast developing markets, as opposed to mature (thus more saturated) markets in Western Europe and North America where conversions are more common,” states Director of Development, MKG Hospitality, Vanguelis Panayotis.
“The sector is also at present very much geared towards the upscale end of the spectrum, therefore future prospects certainly exist for midscale and economy segments as these markets mature.”
MKG’s MENA report shows how the region’s tourism industry and in turn hotel market is clearly distinguished by the prominence of the oil and gas sector. In oil rich GCC for instance, business travel is strong, as is the presence. Despite instability over recent years, brought about by the global economic crisis in key source markets, property bubbles and Arab Spring, the Middle East & North Africa region still offers corporate hotel chain investors and hoteliers enormous potential for future development growth of corporate hotel chains in the upscale end of the spectrum. In fact, these markets are also where regional based corporate hotel chains are fast emerging, such as Rotana and Jumeirah International. In non-oil based destinations, leisure and resort tourism is well developed with many local independent properties. In terms of international groups, they are dominated by relevant hotel products, such as TUI’s large-scale resorts in Egypt, Turkey, Tunisia and Morocco.
“MENA is also not uniformed as a region in terms of demand, but rather split down the middle. We can clearly see disparities through key hotel performance indicators, with countries not moving in the hotel cycle as a cluster like they do in other more mature markets. Due to instability throughout much of the region over recent years, key hotel performance indicators have been in a state of confusion,” adds Panayotis.
At the end of 2011, only four markets recorded RevPAR growth, including Turkey which enjoyed much of the spill over demand from troubled markets in North African and the Levant, as well as the UAE, Kuwait and KSA where business demand remained strong. In 2012, the situation has more or less reversed since results are being compared to depressed figures the year prior and due to a somewhat better political landscape.
Pipeline development for corporate hotel chains in MENA represents more than 96,000 rooms until 2015-2016 to be added to the existing 250,000 rooms. Pipeline is evident throughout the region, but is most prevalent in the UAE and KSA. Overall, the GCC region continues to emerge as a hot spot, as operators fight to gain market share.
Countries in the Arabian Peninsula also have the highest ADR due to most of its stock being in the luxury and upscale segments, as well as of course due to having very high GDP per capital.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
