HVS Dubai has released the 2013 HVS Middle East Hotel Survey, which incorporates key performance indicators (KPIs) as achieved in the various cities and destinations throughout the region; It also provides an overview of the development pipeline for hospitality assets -- an indication of the maximum supportable investment that an owner or an organisation ought to budget when developing a hospitality product. This year’s report features the aggregate of KPIs based on 436 hotels, representing roughly 115,000 rooms in 45 cities.
According to HVS Dubai Managing Director and author of the Survey, Hala Matar Choufany, “research shows that although the region has endured turmoil and instability over the course of the last two years in countries such as Egypt, Libya, Syria and Bahrain, it has celebrated victories notably in Dubai, Oman, Jeddah, Erbil, and Istanbul.”
“Although certain markets may have experienced declining occupancy levels, accommodated room nights across most of the cities experienced an increase. Abu Dhabi, on one hand, registered a decline of three percentage points as a result of all the new openings of luxury hotels, however, accommodated room nights increased from roughly 1.9 million in 2011 to 2.3 million in 2012. This is testament to the fact that whilst a certain destination may appear to be performing weaker at first glance, in actuality, demand continues to experience growth,” explains Choufany.
“The current supply among the listed operators is 116,000 rooms -- suggesting that in the years ahead, the inventory in the Middle East is expected to increase by 162% (not including property expansions),” Choufany continues. Based on a regional hotel occupancy of approximately 64%, in order to maintain the level of occupancy as new supply is introduced into the market, demand must grow at a compound annual rate of 7.8% over the course of the next several years.
“The cities offering the most flexible, or generous, development cost figures are Dubai, Erbil, Istanbul and Jeddah. As the cities in the region that generally achieve the most solid RevPAR figures, this is rather predictable. In order to produce a financially viable project, the maximum supportable investment is largely contingent on the revenues that may be achieved by the rooms product.”
Hala Matar Choufany is the Managing Director of HVS Dubai and is responsible for the firm's valuation and consulting work in the Middle East and North Africa. She possesses an in-depth expertise in regional hotel markets and broad exposure to international markets and maintains excellent contacts with developers, owners, operators, investment institutions and government entities. Choufany is an official Member of the Royal Institution of Chartered Surveyors (MRICS). She also holds an MPhil from Leeds University, U.K., an MBA in Finance and Strategy from IMHI (Essec- Cornell) University, Paris, France and a BA in Hospitality Management from Notre Dame University, Lebanon.
To read the full Report, please click here.
Hala Matar Choufany