Hotel occupancy increases in Egyptian cities Alexandria 5%, Sharm El-Sheikh 1% in Q3 2020: Colliers

Published 25 Nov,2020 via Daily News Egypt - The novel coronavirus (COVID-19) pandemic has continued to impact Egypt’s hotel market through to the third quarter (Q3) of 2020, according to the Colliers International MENA hotels review for the period.

Some markets, such as Alexandria and Sharm El-Sheikh, registered a slightly better performance in Q3 of 2020, recording an increase in hotel occupancy of 5% and 1%, respectively, compared to Q2 of 2020

Colliers said that even with international flights and tourist spots open since the second half (H2) of the year, pick up in key tourism locations has been slow. Hotels have also been operating below 50% capacity, due to the ongoing pandemic.

The report showed that the leisure markets in the Red Sea region, namely Sharm El-Sheikh and Hurghada, have continued to experience low occupancies in Q3 of 2020, resulting in a year-on-year (y-o-y) decline of over 55%. This has resulted in a decline in both average daily rate (ADR) and revenue per available room (RevPAR) for the two markets.

The review mentioned that occupancy in Q3 of 2020 in Cairo, Alexandria, Sharm El-Sheikh, and Hurghada all witnessed a y-o-y decline of 67%, 47%, 55%, and 57%, respectively.

Meanwhile, the report revealed a 15% y-o-y decline in Cairo’s ADR in Q3 of 2020, The ADR for Alexandria for Q3 of 2020 remained the same compared to the same time period last year.

Furthermore, the ADF for Sharm El-Sheikh and Hurghada declined by 14% and 1%, respectively, in Q3 of 2020 compared to the same period last year.

Colliers said that an additional 8,000 keys are expected to open in the Egyptian market by the full year 2022.

“The forthcoming supply might experience delays due to the impact of Covid-19 on projects under construction,” according to Colliers, “The Red Sea markets of Hurghada and Sharm El-Sheikh account for 62% of the forthcoming branded supply in the Egyptian markets.”

As for Saudi Arabia, Colliers said that Riyadh and Dammam/Khobar hotel occupancy has demonstrated continued resilience to the downward pressure applied by COVID-19. In these markets, hotel room night demand fell by only 10% or less. It added that continued governmental support and initiatives, such as the recent Saudi Summers, are expected to assist the market in its recovery.

“Riyadh and Dammam/Khobar continue to perform relatively better than other key markets as of Q3 2020,” Colliers said, “The focus on domestic tourism has benefited the Dammam/Khobar market, contributing to the lower rate of decline in occupancy and ADR versus other KSA markets.”

Colliers added that the reopening of the holy cities of Makkah and Medina for pilgrim visitors is expected to buoy these two markets. Domestic leisure travel is expected to be a crucial source of demand for the other key markets.

Regarding the UAE, Colliers said that the country’s hotels continue to be affected by the COVID-19 pandemic, with the hospitality markets experiencing double digit decreases in occupancy levels. With the country re-opening its borders, demand for travel into Dubai has seen an increase.

“Dubai recorded an occupancy rate of above 40% for the second consecutive month in September 2020 since the peak of pandemic,” said Colliers.

It added that the UAE hotels markets have experienced a decline of 15% to 45% in RevPAR. Ras Al Khaimah was able to achieve the highest RevPAR in Q3 of 2020 compared with other markets in UAE, due in part to the increase in staycations and the domestic tourism market.

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