The Middle East and North Africa (MENA) region’s hotel sector is expected continue benefiting from on-going tourism initiatives once post-COVID-19 recovery begins in fourth quarter (Q4) 2020,, according to Colliers International.
These initiatives include upcoming mega projects as well as domestic tourism drives, the real estate company said.
The Colliers International report on 2020 hotel occupancy forecasts for 24 submarkets in key MENA hospitality markets highlighted the travel and tourism sector has been hardest hit by the coronavirus pandemic.
This came as governments continue to introduce measures to slow the spread of the virus, with hotel owners also taking precautions as travel comes to a halt.
There remains a lot of uncertainty in the market regarding the expected performance of hotels due to the outbreak of COVID-19, Colliers said. The company, however, has projected a recovery to start in Q4 of 2020 and continue into 2021.
Colliers reported that the hotel occupancy in Cairo is forecast to reach 46% in 2020, with a decrease of 41% in Y-o-Y occupancy variance. The report projects that hotel occupancy in the Egyptian capital could reach 65% in 2021, with 41% Y-o-Y occupancy variance.
The Sharm El-Sheikh hotel occupancy rate is expected to reach 31% in 2020, with projections it will reach 43% in 2021. Meanwhile, Alexandria’s hotel occupancy rates are expected to reach 44% in 2020, with an increase in 2021 to record 62%.
Colliers has assumed a faster recovery for the markets in the UAE and Saudi Arabia, adding that the UAE is likely to benefit from the EXPO 2020 build up. The actual event is now expected to start in Q$ of 2021, having been delayed due to the ongoing coronavirus pandemic.
Saudi Arabia’s hotel market forecast in 2020 assumes restricted pilgrim access to Makkah and Madinah during Ramadan and the Hajj pilgrimage.
“Market activity is being impacted in many sectors. The analysis uses the latest available data but given the unknown future impact that COVID-19 might have on the hotel market, any change in the recovery timeline will affect the forecast,” the report said.