Patricia Watkins 
Several countries in the Middle East are ahead of the rest of the world in the rollout of immunization. The United Arab Emirates is a prime example with more than 86% of its population fully vaccinated as of October 25, 2021, according to Our World in Data. As vaccination rates improve, restrictions on international travel continue to be relaxed and demand in the hotel sector continues to improve to pre-pandemic levels. In September, the hotel occupancy rate in the Middle East was 58.6%, the highest level in the region since February 2020 and 93.9% of comparable 2019 (62.4%). These levels reflect a steady upward trend, with the region’s occupancy rate of 50.7% in July and 55.9% in August, representing 83.8% and 88.6% of comparables respectively. of 2019.
Photo: STR
The average daily rate (ADR) is even more advanced, reaching US $ 112.96 in September (99.1% of comparable 2019). It was actually slightly lower than July (US $ 122.73) and August (US $ 116.52) in absolute terms. In July, ADR was 103.9% of 2019 comparable, which was the highest index in the pandemic era.
Photo: STR
Class impact
When looking at hotel categories in the Middle East, it is clear that the lower segment of the market is more advanced in recovering occupancy.
The combined mid-range / economy segment matched its occupancy rate from the third quarter of 2019 during the third quarter of 2021 (65.7%). The high-end / upper mid-range hit 59.7%, or 94.9% of 2019 levels. Luxury / Upper Upscale posted an occupancy rate of 49.2% or 81.4% of the levels of 2019.
However, higher occupancy rates did not translate into higher room rates, as the Q3 mid-range / economy ADR of US $ 46.83 was only 90.4% of the price. comparable from 2019.
Luxury / premium ADR (US $ 171.10), on the other hand, was 94.7% of the 2019 comparable.
Key countries
If we take a look at key countries in the region, some are already outperforming 2019 comparables recently, while others are approaching their pre-pandemic levels.
The hotel occupancy rate in the third quarter in Qatar was 68.8%, an improvement of 11.4% compared to the third quarter of 2019.
The United Arab Emirates reached 61.4% occupancy in the last quarter, or 92.0% of comparable 2019 (66.7%).
Saudi Arabia improved with an occupancy rate of 41.1% in the third quarter, but was even further away from 2019 levels.
Photo: STR
ADR, as mentioned, was already ahead of 2019 levels for most of these countries during the third quarter: United Arab Emirates (+ 8.3%), Qatar (+ 6.0%) and Bahrain ( + 0.1%).
Conclusion
As the months progress and more international travel materializes, hotels in major corporate dependent markets and the MICE segment will see a better balance in their composition of demand. During the pandemic, domestic demand was the main driver of activity, which is why the recovery has been uneven when looking at the different types of hotels in a market.
About STR
STR provides benchmarking data, analysis and high-end market insights for the global hospitality industry. Founded in 1985, STR is present in 15 countries with a North American headquarters in Hendersonville, Tennessee, an international headquarters in London and an Asia-Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of online commercial real estate information, analysis and markets. For more information, please visit str.com and costargroup.com.
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