Included in this roundup of news from the MEA region: JLL projects strong 2018 for sub-Saharan Africa; full-year MEA performance; and more.
Each week, Hotel News Now features a news roundup from a different global region. Today’s compilation focuses on Middle East/Africa.
JLL forecasts strong performance in sub-Saharan Africa
While the challenges facing businesses in sub-Saharan Africa remain significant, officials with JLL expect hotel performance in the region to be strong in 2018, with the pace of transactions increasing. In comments on the region, Xander Nijnens, EVP of JLL’s hotels and hospitality group for sub-Saharan Africa, said he expects to see strong RevPAR growth, and performance will be especially good in midmarket segments.
“We predict higher investor interest and supply growth in these segments than in any other supply segment in the region for 2018 and beyond,” he wrote.
The outlook is not all cheery, though, as Nijnens notes “lenders into the continent remain conservative” and that JLL does not “anticipate that sentiment will improve considerably in the short term and 2018 will be another tough year for hotel lending, with the availability of debt limited and often expensive.”
Full-year 2017 performance data for MEA
Key performance indicators for African hotels were trending up in 2017, as they moved in the opposite direction in the Middle East, according to data from HNN’s parent company STR.
African hotels saw occupancy increase 5.6% to 58% and average daily rate climb 7.4% to $104.15. These combined for a 13.4% increase in revenue per available room to $60.43.
Middle Eastern hotels saw drop in each of the three metrics, with occupancy down 1.1% to 65%, ADR down 4.5% to $164.33 and RevPAR down 5.6% to $106.89.
The tourism numbers weren’t all bad in the Middle East, though. The United Nations World Tourism Organization noted the region saw a 5% increase in arrivals to 58 million for the year. Africa, meanwhile, saw an 8% increase to 62 million.
Jumeirah announces new brand, new CEO
January has been a month of change for Jumeirah Group, which launched a new experienced-focused brand and announced a new chief executive.
The new brand is called Zabeel House by Jumeirah and was created to target “the continuing and growing travel trend for exploration and enrichment through travel experiences. The new brand has five deals signed in the United Arab Emirates, Saudi Arabia and the U.K.
The brand launch took place roughly a week after Jumeirah announced Jose Silva as the company’s new CEO. Silva was most recently regional VP overseeing France, Switzerland, Spain and Portugal for Four Seasons Hotels & Resorts.
Middle East lenders making push into Turkey
Lenders based in Dubai, United Arab Emirates, Qatar and Kuwait are all making pushes into Turkey, which Bloomberg notes could be accelerated by Dubai-based Emirates NBD PJSC pursuit of Sberbank PJSC’s Turkish unit.
“With several (Gulf Cooperation Council) banks already present in Turkey and given the geographical proximity, lenders are familiar with the Turkish economy and banking system,” Trieu Pham, an emerging-markets credit-strategy analyst for MUFG Securities, told Bloomberg. “Turkey provides favorable dynamics with a large and young population and high GDP growth. Most of the larger banks in Turkey are relatively profitable as well.”
VAT introduction seen as sign of Saudi, UAE maturity
Terence Baker, senior reporter, Europe, for HNN, writes that the business community is regarding new 5% value-added taxes in Saudi Arabia and the United Arab Emirates as a sign of economic maturity for the two nations. Several other countries in the region already have similar taxes.
“It is a sign of the market maturing, and of course that is very common in other parts of the world,” said Olivier Harnisch, CEO of Emaar Hospitality Group.
GIOHIS kicks off in Abu Dhabi
HNN’s Baker also reports from the start of the Gulf & Indian Ocean Hotel Investors’ Summit in Abu Dhabi, United Arab Emirates, that owners in the region seem to be displeased with weak performance.
“As ADR and revenue per available room continue to be squeezed, many took the opportunity of the very frank discussion this conference is known for to discuss the problems,” Baker wrote.
Deals and development
- The 190-room InterContinental Fujairah Resort opened in Fujairah, United Arab Emirates. The property is the first InterContinental resort in the Middle East.
- The 93-room ME Dubai was announced by Meliá Hotels International with plans to open by the end of 2018.
- The 152-room Radisson Hotel Dakar Diamniadio opened in Dakar, Senegal. The property is Carlson Rezidor Hotel Group’s second in the market.
Compiled by Sean McCracken.