GCC hospitality revenues to hit $32bn by 2022

July 28, 2018

The GCC hospitality sector revenue is expected to reach $32.5 billion by 2022, at a CAGR of 7.2 per cent (2017-2022), primarily driven by mega events such as Dubai’s World Expo 2020, Qatar’s Fifa World Cup 2022 and government initiatives to boost tourism, a new report revealed.

According to an industry report by Alpen Capital, a Dubai-based investment banking advisory firm, the growth in hospitality sector revenue of individual GCC countries is expected to range from 6.0 per cent to 12.0 per cent.

Bahrain is expected to outperform the GCC average, with revenues expected to go up 9.6 per cent, backed by government-led initiatives and leisure segment driving the hospitality sector growth. UAE's revenue growth is expected to continue to grow above the GCC average (up 8.5 per cent) on account of its attractive leisure and business tourism segment along with the World Expo 2020 which is expected to attract over 20 million tourist arrivals.

Qatar is expected to witness highest revenue growth during the forecast period (2017-22) on account of significant investment activities in the tourism and hospitality sector for the upcoming Fifa World Cup 2022 event, which is expected to attract over 1.5 million tourist arrivals in 2022.

The GCC hospitality industry is expected to command a significant supply of hotel rooms to cater to this upcoming demand. The host countries of these events have already initiated various hotel construction projects to be completed through 2022. In addition to the luxury segment, Dubai (the host country of World Expo 2020) is also focusing on developing the mid-market hotel segment to attract travellers with restrictive budgets or (or cost conscious travellers). Qatar (the host country of Fifa World Cup 2022) is expected to have a healthy five-year CAGR of hotel supply at 12.82 per cent till 2022. Oman is expected to increase its hotel supply at a five-year CAGR of 5.6 per cent till 2022. Relatively, Kuwait’s hotel supply is expected to rise at a five-year CAGR of 4.4 per cent till 2022.

The occupancy and ADR of hotel and service apartments are expected to increase on account of the mega events, which are expected to generate higher tourist arrivals (business and leisure tourists).

Average GCC occupancy is expected to increase by 6 percentage points, from 62 per cent in 2017 to 68 per cent in 2022. Economic growth and government initiatives leading to an increase in tourist arrivals are expected to support growth in occupancy and room rates. ADR is expected to increase at a CAGR of 1.1 per cent to $161 in 2022 whereas the RevPAR is expected to increase at a CAGR of 2.9 per cent to $109 in 2022.

Country-wise hospitality market forecast

Saudi Arabia

Saudi Arabia hospitality market is expected to grow at a CAGR of 6.5 per cent (2017-2022) to $21.3 billion mainly driven by religious tourism. Its international tourist arrivals are expected to grow at a five-year CAGR of 2.8 per cent to 21.8 million in 2022, expansion in the hospitality sector is also expected to grow at a five-year CAGR of 2.5 per cent to reach 541,000 rooms in 2022. A total 27,281 rooms are expected to open in 2018 alone. ADR is expected to grow at a five-year CAGR of 1.3 per cent to $166 by 2022, whereas the RevPAR is expected to grow at a five-year CAGR of 3.8 per cent to $110 by 2022.

UAE

UAE hospitality market is expected to reach $7.6 billion by 2022 at a five-year CAGR of 8.5 per cent (2017-2022). International tourist visits are expected to grow at a five-year CAGR of 4.3 per cent to 25.5 million whereas the hotel supply is expected to grow at a five-year CAGR of 6.0 per cent to 183,718 hotel rooms. ADR is expected to grow at a five-year CAGR of 1.3 per cent to $149 till 2022, whereas the RevPAR is expected to grow at a five-year CAGR of 2.1 per cent to $116 by 2022.

Qatar

Qatar hospitality market is expected to grow at a CAGR of 12.1 per cent (2017-2022) to $1.4 billion by 2022. Its hotel sector is dominated (70 per cent) by four-star and five-star hotels. International tourist visits are expected to grow at a five-year CAGR of 5.0 per cent to 2.9 million whereas the hotel supply is expected to grow at a five-year CAGR of 12.8 per cent to 46,000 hotel rooms. ADR is expected to grow at a five-year CAGR of 0.5 per cent to $164 till 2022, whereas the RevPAR is expected to decline at a five-year CAGR of 0.4 per cent to $91 by 2022.

Bahrain

Bahrain hospitality market is expected to grow at a CAGR of 9.6 per cent (2017-2022) to $0.7 billion by 2022. International tourist visits are expected to decline to 10.2 million in 2022 due to the absence of major events/ triggers; whereas hotel supply is expected to grow at a five-year CAGR of 8.8 per cent to 24,761 hotel rooms by 2022. ADR is expected to be flat at $153, whereas the RevPAR is expected to grow at a five-year CAGR of 0.7 per cent to $83 in 2022.

Kuwait
Kuwait hospitality market is expected to grow at a CAGR of 6.1 per cent (2017-2022) to $0.4 billion by 2022. International tourist visits are expected to grow at a five-year CAGR of 4.4 per cent to 0.5 million whereas the hotel supply is expected to grow at a five-year CAGR of 4.4 per cent to approximately 10,112 hotel rooms. ADR is expected to be flat at $208, whereas the RevPAR is expected to grow at a five-year CAGR of 1.7 per cent to $126 by 2022 (from $116 in 2017).

tradearabia