STR Global MD Randall says Middle East hotel industry grew in first quarter

STR Global managing director Elizabeth Randall told the 7th annual Arabian Hotel Investment Conference (AHIC) this morning that - with the exception of Middle East markets affected by political turbulence - the region’s hotel industry has performed well in the first quarter of 2011.

She said that demand in most markets was up though this has not been translated into higher room rates due to continuing supply growth across the region.

“We can see that supply is beginning to flatten out and drop a little bit in the Middle East region,” Randall said. “This suggests that supply has been absorbed.”

Randall said Abu Dhabi has seen an increase in occupancy in the first quarter of 2011. Other Middle East hotel markets that grew in the first quarter of 2011 were Al-Khobar, Doha, Dubai, Kuwait City, Medina, Muscat and Jeddah. Randall said that the occupancy rate in the Dubai, at about 80 per cent, was the highest in the Middle East in the first quarter of 2011.

“For most markets, with the exception of Dubai and Abu Dhabi, supply is going to be quite constrained,” Randall said. “Dubai is projected to have a 7 per cent rise in average hotel prices in 2011 and 2 per cent in 2012. This is because of people changing their travel plans away from unstable markets.”

Randall said that Abu Dhabi plans to build about 40,000 new hotel rooms and about 15,000 hotel rooms are due to enter the market in Dubai.