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STR: 2016 EMEA, Central/South America hotel performance

Hotels in the Middle East reported negative total-year 2016 results, while hotels in Africa showed mixed performance when reported in U.S. dollar constant currency. Hotels in Europe recorded positive performance for total-year 2016 when reported in euro constant currency, according to data from STR.

LONDON – Hotels in the Middle East reported negative total-year 2016 results, while hotels in Africa showed mixed performance when reported in U.S. dollar constant currency, according to data from STR.

U.S. dollar constancy currency, year-over-year comparisons:

Middle East

  • Occupancy: -2.2% to 66.2%
  • Average daily rate (ADR): -7.2% to US$174.60
  • Revenue per available room (RevPAR): -9.2% to US$115.59  

Africa

  • Occupancy: -3.6% to 55.4%
  • ADR: +10.7% to US$108.14
  • RevPAR: +6.7% to US$59.87

Local currency, year-over-year comparisons:

Egypt

  • Occupancy: -14.5% to 45.8%
  • ADR: +31.2% to EGP793.97
  • RevPAR: +12.3% to EGP363.46

Egypt’s occupancy continued to fall amid ongoing security concerns, dropping 36.2% below pre-Arab Spring levels. The devaluation of the Egyptian pound resulted in a sharp increase in ADR when reported in local currency, but when reported in U.S. dollars, year-end ADR growth was 2.5%. Egypt has recorded very little supply growth since 2012, while demand has been volatile (-13.9% for 2016).

Saudi Arabia

  • Occupancy: -4.8% to 59.5%
  • ADR: -3.9% to SAR764.08
  • RevPAR: -8.5% to SAR454.84

The oil crisis has heavily affected Saudi Arabia’s economy and hotel industry. As STR reported in August 2016, there is a correlation between the drop in oil prices and the downturn in hotel performance and profitability for Gulf Cooperation Council countries. At the market level, Riyadh was heavily affected in 2016 with occupancy down 10.2% and ADR down 8.1%. According to STR analysts, oil is not the only factor affecting the country’s hotels, however, as sharp supply growth has pressured occupancy levels and overall performance. In December, Saudi Arabia’s Luxury segment experienced an 18.6% increase in supply compared with the same month the previous year, contributing to a 23.3% year-over-year RevPAR decline for the country’s Luxury hotels during the month.

United Arab Emirates

  • Occupancy: +0.3% to 75.0%
  • ADR: -9.2% to AED631.51
  • RevPAR: -9.0% to AED473.70

While supply (+4.8%) in the United Arab Emirates grew at a rapid pace, demand (+5.0%) grew at a stronger rate for the first time since 2013. At the market level, Abu Dhabi closed the year with declines in both occupancy (-3.6% to 71.7%) and ADR (-9.9% to AED467.49). Dubai reported a slight increase in occupancy (+0.5% to 77.3%) but a significant drop in ADR (-9.9% to AED711.41).  

2016 Europe hotel performance
Hotels in Europe recorded positive performance for total-year 2016 when reported in euro constant currency, according to data from STR.

Euro constant currency, year-over-year comparisons:

Europe

  • Occupancy: +0.6% to 70.4%
  • Average daily rate (ADR): +1.5% to EUR111.77
  • Revenue per available room (RevPAR): +2.1% to EUR78.64

Local currency, year-over-year comparisons:

Poland

  • Occupancy: +3.7% to 71.3%
  • ADR: +7.7% to PLN272.60
  • RevPAR: +11.6% to PLN194.34

With security concerns in markets like France and Belgium, Poland benefitted as an alternative destination, according to STR analysts. Additionally, the country’s hotels benefitted from hosting a variety of major events throughout the year, most notably the July NATO Summit in Warsaw, when the market’s RevPAR increased 22.1% for the month. For the full year, the Polish capital recorded a 10.8% increase in RevPAR to PLN227.18. Outside of the capital, Wroclaw was named a 2016 European Capital of Culture and recorded 8.6% growth in occupancy as well as a 13.1% rise in ADR.

Spain

  • Occupancy: +3.5% to 74.0%
  • ADR: +7.8% to EUR108.11
  • RevPAR: +11.6% to EUR80.01

STR analysts note that more than 70 million international tourists visited Spain in 2016. The country benefitted as an alternative destination for many as ongoing security concerns have hindered tourism in some western European markets as well as in Northern Africa and the Middle East. Spain’s total-year occupancy level was the highest for the country since 1999.At the market level, Barcelona posted RevPAR growth of 9.8%, while Madrid recorded growth in the metric of 6.6%.

United Kingdom

  • Occupancy: -0.2% to 77.2%
  • ADR: +1.6% to GBP89.21
  • RevPAR: +1.4% to GBP68.88

In the second half of 2016, U.K. hotels posted steady demand growth, but a 2.0% year-over-year increase in supply led to the marginal year-end occupancy decline. London recorded 6.9% growth in occupancy in December, as the pound devaluation has made travel to the destination more affordable for visitors from North America and Europe. For 2017, STR and forecast partner, Tourism Economics, project that “staycations” will play a major role for hotel performance across the U.K., as travelling abroad has become more expensive following the devaluation of the pound.

Central/South America hotel performance
Hotels in the Central/South America region reported mixed performance for total-year 2016 when reported in U.S. dollar constant currency, according to data from STR.

U.S. dollar constancy currency, year-over-year comparisons:

Central/South America region

  • Occupancy: -4.3% to 55.6%
  • Average daily rate (ADR): +9.3% to US$94.69
  • Revenue per available room (RevPAR): +4.5% to US$52.64

Local currency, year-over-year comparisons:

Brazil

  • Occupancy: -6.8% to 52.9%
  • ADR: +5.5% to BRL313.15
  • RevPAR: -1.7% to BRL165.54

Brazil’s full-year ADR was aided greatly by the Rio Olympics. For the year, Rio de Janeiro posted a 22.3% ADR increase to BRL556.47, but a 12.8% drop in occupancy to 52.6%.

Brazil’s occupancy has declined for three consecutive years, due in large part to an influx of supply: 2014 (+2.7%), 2015 (+3.2%) and 2016 (+4.1%). That supply growth is expected to continue as Brazil’s current development pipeline represents 14.9% of its existing supply.

Colombia

  • Occupancy: +2.7% to 58.3%
  • ADR: +4.4% to COP264,765.51
  • RevPAR: +7.3% to COP154,324.81

STR analysts note that Colombia’s strong year was driven primarily by the first six months of 2016, when the country recorded double-digit RevPAR growth. Bogota hotels recorded double-digit RevPAR growth (+10.7%) for the year, with a 6.2% increase in occupancy to 56.8% and a 4.2% rise in ADR to COP288,875.50.

Peru

  • Occupancy: -3.8% to 62.7%
  • ADR: +0.9% to PEN454.77
  • RevPAR: -2.9% to PEN285.34

While overall performance for the year was down, Lima hosted APEC Peru 2016 in November, which drove the country’s RevPAR up 20.8% for that month. In December, however, Peru recorded a 10.0% year-over-year RevPAR decline.

Lima recorded a 3.2% decline in occupancy for the full year, at an actual level of 67.9%, while ADR increased 2.0% to PEN498.31.

News Editor - TravelDailyNews Media Network | + Posts

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.

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