Included in this roundup of news from the MEA region: Disappointment in Saudi Arabia; Ramadan performance; June pipeline numbers; and more.
Each week, Hotel News Now features a news roundup from a different global region. Today’s compilation focuses on Middle East/Africa.
Hopes for a Saudi emergence dwindle
Economic performance in Saudi Arabia hasn’t lived up to expectations as the country looks to move further away from the struggling oil industry, reports Bloomberg. That has been a hit to those who had bet on the country’s economy taking a big jump.
Sources told Bloomberg the cost of investing in the country doesn’t match up with the low level of profitability.
“We need to see more non-oil revenues, which would hopefully trickle down to improve economic growth and company earnings,” Mohamad Al Hajj, equities strategist at EFG-Hermes in Dubai, told Bloomberg. “Without earnings growth, you can’t continue to rely on multiple expansion to drive performance.”
In the Middle East, there was a 3.6% increase in rooms under contract compared with June 2016 and now sits at 160,120 in 583 projects. In construction rooms jumped 15.6% to 94,748 rooms in 300 projects.
Africa saw a 1% increase in rooms under contract, with 56,289 rooms in 310 projects. In construction numbers fell 6.5% to 28,700 rooms in 165 projects.
Mangalis targets Africa for growth
Mangalis Hotel Group continues to focus on Africa, writes senior reporter Terence Baker, to add new hotel supply, keying in on markets with “high demand, suitable management partners and where airlines and investors have increased interest.”
The company has actually scaled back its African growth targets, Baker writes, from 70 open properties by 2019 to 47 open or in development by 2021. Olivier Jacquin, CEO of Mangalis, said earlier targets were “not realistic.”
Ramadan hits hotel performance in GCC
Data from STR shows performance declined in most Gulf Cooperation Council markets when comparing Ramadan 2017 with Ramadan 2016. The dates compared were 26 May through 25 June 2017 and 6 June through 6 July 2016.
Of the eight markets looked at in the analysis, six saw drops in revenue per available room, the highest of which was a 15% drop in Qatar, fueled by a 7.2% drop in occupancy and an 8.3% fall in average daily rate.
Muscat, Oman, was the only market to see increases in RevPAR. The market’s 19.4% increase in occupancy overcame a 9% drop in ADR for an 8.7% increase in RevPAR.
Iran faces new sanctions
Reuters reports Iran is the target of new economic sanctions, which U.S. President Donald Trump’s administration created as a reaction to the country’s ballistic missile program and “contributing to regional tensions.”
A statement from the U.S. Department of Treasury said it’s “targeting 18 entities and people for supporting what is said was ‘illicit Iranian actors or transnational criminal activity.’”
Deals and development
- The first Fairmont property, the 209-room Fairmont Quasar Istanbul, opened in Turkey.
- The 164-key Staybridge Suites Jeddah Alandalus Mall opened, marking the brand’s first property in Saudi Arabia.
- The 96-room Holiday Inn Mutare opened in Mutare, Zimbabwe. It is the brand’s first property in the country.
- Hilton has reached an agreement with Niamey Hotel & Suites Niger to develop the 142-room Hilton Niamey in Niamey, Niger. When it opens in 2019, the hotel will be the first branded by a global chain in the country.
- The 286-room ibis Styles Makkah opened in Mecca, Saudi Arabia.
- Minor Hotels announced plans for the 150-key Avani Mauritius Bel-Ombre Resort & Spa, to open in 2021 in Mauritius.
- The Radisson Blue Hotel, N’Djamena opened in N’Djamena, Chad, marking Carlson Rezidor’s first property in Chad.
- Carlson Rezidor signed a deal to develop the Radisson Blu Hotel, Riyadh Al Sahafa in Riyadh, Saudi Arabia.
- Millennium Hotels and Resorts signed a deal with SuperCasa Developmentfor a 339-key resort in Ras Al Khaimah, United Arab Emirates.
- Dusit International signed an agreement with Al Manzil Hospitality to manage Dusit’s first property in Bahrain. The195-room dusitD2 Seef Bahrain will open in Manama, Bahrain in 2018.
Compiled by Sean McCracken.