Included in this roundup of news from the MEA region: Global oil supply shortage possible; Middle East/Africa quarterly 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.
Global oil shortage likely in coming year
Oil industry analysts expect a $370-billion decline in international investments, which—combined with the continued drop in crude oil prices—could cause a global shortage in the next two years, Bloomberg reports.
Wood MacKenzie Limited projects a 3% decline in oil and natural gas production in 2016—equal to 5 million barrels of oil—and another 4% production drop, or 6 million barrels, in 2017.
United Arab Emirates Energy Minister Suhail Al Mazrouei said last week the oil market is “moving toward balancing,” but the amount of postponed projects by the industry is the biggest warning sign of potential supply shortages in the coming years.
“This is what we are concerned about,” Al Mazrouei said. “The number of postponed projects is massive.”
OPEC urges cooperation on recovery plan
The secretary-general of the Organization of Petroleum Exporting Countries has urged oil producers and major crude suppliers to collaborate to right the ship of the global oil industry, Bloomberg reports.
Mohammed Barkindo said Tuesday if OPEC does not implement the deal it reached in September—which helped push oil prices to a 15-month high above $50 a barrel—there will be “negative consequences on the already fragile state of the industry.”
“Failure to jointly act with our non-OPEC colleagues and friends in accordance with the Algiers accord will further elongate this period of very low growth, this period of instability in the market, and will put forward, further, the re-balancing process,” Barkindo said during a briefing in Abu Dhabi.
MEA hotel performance for Q3, September 2016
In the third quarter of 2016, the Middle East reported mixed year-over-year results, according to STR, HNN’s parent company. While the region reported a 1.6% increase in occupancy to 63.3%, average daily rate for the quarter was down 9.2% to $160.40 and revenue per available room dropped 7.7% to $101.51. During Q3 2016, Africa experienced nearly flat occupancy, growing 0.2% to 58.6%. ADR was up 9% to $101.66, and RevPAR grew 9.2% to $59.59.
Abu Dhabi, United Arab Emirates, reported negative results across the three key performance metrics in the third quarter of 2016. Occupancy fell 3.3% to 65.8%; ADR was down 6.7% to 372.46 Emirati dirham ($101.41); and RevPAR dropped 9.7% to 245.08 Emirati dirham ($66.73).
For September 2016, the Middle East reported a 1.7% decrease in occupancy to 66.8% when compared with September 2015. ADR for the month was down 5.9% to $177.83. RevPAR dropped 7.5% to $118.75. Africa experienced a 2.0% decrease in occupancy to 59.2%, but ADR was up 7.6% to $99.83, and RevPAR grew 5.4% to $59.06.
MEA hotel pipeline
STR’s September 2016 Pipeline Report shows 159,127 rooms in 555 projects under contract in the Middle East (+14.8% year-over-year increase) and 56,858 rooms in 303 projects under contract in Africa (8.3% year-over-year increase).
Specifically in the in construction phase, the Middle East reported 83,416 rooms in 257 hotels, an 8.5% increase in year-over-year comparisons. Africa reported 29,006 rooms in 154 hotels in construction, which is a 7.8% increase in year-over-year comparisons.
Deals and developments
- Meliá Hotels International intends to expand its portfolio in the country of Cape Verde, an island nation located in an archipelago off the northwest coast of Africa. Meliá has added a resort in Ponta Jandangue on the island of Santiago, which will include three all-inclusive hotels with a combined total of 600 guestrooms. The resort will open between 2019 and 2020.
- Abu Dhabi’s National Corporation for Tourism and Hotels has approved Marriott International’s Ritz-Carlton brand to manage a 300-room property on Saadiyat Island. An official date of completion has not been announced.
- The 125-room Millennium Golden Horn Hotel, Istanbul, is scheduled to open in 2017 and will be Millennium & Copthorne’s first hotel in Turkey.
- Deutsche Hospitality has opened the 209-room Steigenberger Airport Hotel Istanbul, Deutsche’s second hotel in Turkey.
- Mövenpick Hotels & Resorts opened the 503-room Mövenpick Hotel Mansour Eddahbi Marrakech in Marrakech, Morocco.
- Four Seasons Hotels and Resorts will debut in Kuwait with the 248-room Four Seasons Hotel Kuwait at Burj Alshaya, which will open in early 2017 in Kuwait City.
Compiled by Dan Kubacki.