Saudi hotels suffer in wider slump across the Middle East in July

July was a challenging month for hotel operators across the Middle East, with particularly poor performance in Saudi Arabia, according to STR.

The market research firm said occupancy across the region dropped 2.8 per cent to 56.1 per cent, compared to the same month last year.

The average daily rate (ADR) in the Middle East was also down 16.1 per cent to $134 and revenue per available room (RevPAR) declined 18.4 per cent to $75.

Among the Gulf Cooperation Council markets to take a performance hit was Bahrain where occupancy dipped 1 per cent to 49.3 per cent.

Compared to July 2016, ADR in the kingdom was also down 11.5 per cent to BHD64.91 and RevPAR declined 12.4 per cent to BHD32.03.

STR said the dip in performance followed increases in June during the post-Ramadan celebrations but was in line with recent trends in the country, where RevPAR through July was down 6.9 per cent compared with the first seven months of 2016.

Saudi Arabia fared even worse than its neighbour with occupancy falling 5.2 per to 48 per cent.

The ADR in the country was down a substantial 31.6 per cent year-on-year to SAR625.78 and RevPAR declined 35.2 per cent to SAR300.14.

The performance decline followed a weak first half of 2017, with July to year-date RevPAR also down 15.1 per cent.

STR analysts said the performance slump was more substantial than that typically seen in Saudi during the summer months due to the impacts of low oil prices and high hotel supply growth.

Preliminary data from STR published earlier this month, also showed occupancy down 3.6 per cent in Dubai in July to 65.7 per cent.

Read: Dubai hotel rates down double digits in July

The ADR in the emirate dipped 11.5 per cent to Dhs471.25 and RevPAR was down 14.7 per cent to Dhs309.76.

GCC hotel operators have faced tougher conditions in recent years due to the strength of the dollar, new room supply and a region-wide slump linked to the low oil price.

Read: GCC hotels seek return to growth after a tough 2016

Ramadan rates were also down across almost all of the Gulf’s major hotel markets compared to 2016.

Read: GCC hotel markets report worse Ramadan performance than last year