Hoteliers expect mixed results for the Middle East and North Africa region’s tourism sector in 2011.

Many of the Middle East and North Africa’s tourism markets started to show signs of recovery in 2010 after the global recession in 2008 had curtailed growth. Last year, the Middle East recorded a 14 per cent year-on-year increase in tourist arrivals, twice the growth percentage for the entire world, according to consultancy firm HVS Dubai.

Airport Passenger Movements
  2006 2007 2008 2009 2010
Abu Dhabi 4.8 6.6 8.7 9.4 10.5
Cairo 10.7 12.5 14.3 14.3 14.3
Doha 8.7 10.8 12.2 13.1 15
Dubai 27.9 33.5 36.6 40.1 47.2
Jeddah 13.3 14.4 15.3 15.3 15.3
Manama 1.8 2 2.2 2.3 2.3
Muscat 4.5 4.1 3.9 4.6 5.8
Source : HVS

But the political turmoil of the first four months of 2011 has had a negative impact on the region’s key tourism markets. For the first quarter of the year, the occupancy rates for hotels in the Middle East and North Africa dropped by 7.8 per cent to 56.8 per cent, according to figures from US-based STR Global.

Two countries affected directly by the unrest, Bahrain and Egypt recorded declines in revenue per available room (revpar) by 79 per cent and 68 per cent respectively, according to STR Global. Both countries recorded occupancy rates of only 25 per cent.

The Belgian-based Rezidor Hotel Group, which has 40 hotels open or under development in the Middle East and North Africa, has seen occupancy levels affected by the protests. Its business dropped by one quarter in Bahrain and has seen occupancy rates drop in Egypt and Libya, according to Puneet Chhatwal, executive vice-president and chief development officer, Rezidor Group.

However, the first quarter of 2011 has not brought bad news for all of the region’s tourism markets. Those involved in the region’s hotel industry are keen to stress the differences between each market.

“The Middle East market as a whole is difficult to analyse. One has to look at each country. Particularly in light of the political problems, the situation is not the same from one country to another,” says Charlie Langlais, chief operating officer, France-based Accor group.

“Most of the GCC countries are doing well. The only exception is Bahrain,” Langlais adds.

The Accor Group currently owns 54 hotels in the region and is aiming to have 73 properties in the region by the end of 2014.

The politically stable markets are expected to perform well in 2011, and the UAE is expected to benefit from the instability elsewhere in the region.

The UAE’s hotel market is already showing signs that it is benefitting from demand being diverted from other locations in the region that have been affected by the political turmoil sweeping through the region.

According to figures from STR Global, occupancy figures in Dubai were 80 per cent for the first quarter of 2011, the highest in the Middle East and North Africa region.

The UAE’s Jumeirah Group recorded a 7 per cent increase in revenue per available room (revpar) for the first quarter of 2011 when compared with the same period last year. The Jumeirah Group’s hotels recorded an average occupancy of 85 per cent for the first four months of 2011.

Saudi Arabia and Qatar are two other markets that have avoided the political unrest so far and are expected to offer growth potential for the tourism sector in 2011.

Saudi Arabia’s tourism industry generated SR20bn ($5.3bn) in 2010, and is forecasted to increase to SR80bn by 2015. The growing religious tourism sector is the main factor behind the increasing demand.

“Saudi Arabia is definitely doing well, and it is developing its hospitality infrastructure. We strongly believe in Saudi Arabia being a driving market in the region,” say Jalil Mekouar, executive vice president for Middle East and North Africa, Jones Lang Lasalle.

Qatar’s selection as the host country for football’s World Cup in 2022 has meant that it has become key target for regional and international hotel companies. Qatar has pledged to provide upward of 50,000 hotel rooms over the next 11 years in order to host the tournament.

The $60bn of infrastructure work planned in preparation will also provide a significant demand for more hotel rooms in the short term as foreign firms descend on the Gulf state to design and build what is required, says Kevin Underwood, vice president of design and planning division at US-based consultant Aecom.