One of the global leaders in real estate services, Colliers International expects hotels in the UAE and Saudi Arabia to recover from COVID-19 faster than other regional markets. The group has already witnessed the highest demand in months at the northern Emirate of Ras Al Khaimah during September 2020.
Colliers International observed that smaller markets in the UAE region have seen improved performance generated by domestic demand and the gradual return of international travel.
The firm cited hotels in the northern emirates of Ras Al Khaimah City (RAK) and Sharjah as well as the eastern Emirate of Fujairah to have witnessed higher levels of demand recovery in the third quarter.
A survey conducted by Colliers revealed that the occupancy levels in Ras Al Khaimah City reached 71 percent with Sharjah and Fujairah touching 45 percent in occupancy rates. The firm expects occupancy levels at RAK to drop slightly to 68 percent next year while Sharjah and Fujairah will increase their occupancy to 56 percent and 49 percent respectively in 2021.
In Saudi Arabia, Khobar has achieved relatively higher occupancy levels when compared to other key markets in the Kingdom. Khobar is expected to peak its occupancy to reach 50 percent in 2020 only to slightly dip over 2021 to settle at 49 percent as per forecasts.
Slower recovery at Egypt
Colliers observes that The Red Sea resorts in Egypt have seen a drop in their performance levels after many hotels were closed after being severely impacted by the pandemic.
Hurghada, one of the country’s main tourist centers located on the Red Sea coast is struggling with occupancy levels as low as 29 percent in 2020 while things are expected to be better in 2021 with a projection to reach 48 percent occupancy.
forecasts made by Colliers International at its MENA Hotel Market Survey September 2020 assume that the hospitality sector will begin its recovery in the fourth quarter of 2020, extending into 2021.
The forecast made by the report for UAE and Saudi assumes that the faster recovery for both regions will be supported by the build-up for Expo 2020, and opening up of the Kingdom’s holy cities for pilgrimage during Ramadan and Haj.
“Once the expected recovery begins in Q4 2020, the markets are expected to continue benefiting from the on-going tourism initiatives, upcoming mega projects as well as domestic tourism,” the report stated.
The report forecasts occupancy levels to improve in 2021 with Makkah to see 101 percent occupation backed by post-pandemic pilgrims. Regional tourist hotspots like Dubai’s Palm Jumeirah are expected to witness a rise in occupancy to reach 67 percent, from 39 percent in 2020.
Colliers forecasts that Dubai Marina/JBR will see the highest occupancy in 2021 at 69 percent.
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