THE BURGEONING hotel sector in the Middle East and North Africa is both a boon and bane to tourism, with oversupply threatening to derail overall profitability, according to a presentation at the World Travel Market Vision Conference – Dubai on Tuesday.
Euromonitor International travel and tourism industry analyst, Nadejda Popova, warned that oversupply was a pressing issue, with Abu Dhabi and Dubai the most exposed.
“Although arrival numbers are growing in these cities, supply is outpacing demand, resulting in lower than expected occupancy rates and RevPAR figures,” she said.
Popova pointed out that the Middle East benefits from some of the highest RevPARs worldwide, and “may be undergoing a small structural change post-crisis, as the luxury price proposition corrects itself”.
Popova also revealed new hotel development in the region had slowed as a result of the global downturn. However, she said the UAE, Saudi Arabia, Egypt, Qatar and Jordan all have more than 3,000 rooms each in the pipeline, based on studies by hospitality research firm STR Global.
Asian hotel chains such as Dusit, Shangri-La, Banyan Tree and Anantara are all contributing to the expansion, opening properties in the UAE, Egypt and Oman. Budget hotels are also expanding, with Accor leading the way with four Ibis-branded hotel openings in the region by 2012.
World Travel Market exhibition director, Simon Press, said: “The Middle East and Africa are now an integral part of the global travel and tourism industry. The region’s inbound tourism numbers are growing, but hotels need to balance the expected increase in demand with the number of rooms available.”
