According to a new report, hotels in the Middle East and North Africa (MENA) region are likely to begin recovering from the corona virus slump in the last quarter of 2020 itself.
The turnaround, to be led by the UAE and Saudi Arabia, will begin in 2021, and will be partly fueled by efforts to revive the tourism sector, as well as the launch of mega-projects and demand for local tourism, Colliers said in its latest analysis.
Colliers International is a global commercial real estate services company headquartered in Canada.
The report said that the UAE market will benefit from the build up to the World Expo, scheduled for the last quarter of 2021, while Saudi Arabia is already beginning to welcome a limited number of pilgrims after months of tight restrictions.
“UAE will benefit from the build up to the Expo with the actual event expected to start in the fourth quarter of 2021. In Saudi, the forecast assumes restricted pilgrim access to Makkah and Madinah during Ramadan and Hajj,” Colliers said in its report.
The tourism and travel sectors were among the worst hit by the corona virus pandemic.The lock down since March left the industry with vacant hotels and diminished revenues.
The UAE World Expo, which is considered to be a catalyst for trade, tourism and investment, had to be pushed to 2021. Saudi Arabia too, was forced to ban international pilgrims.
It was only around May that lock down measures began to ease and airlines slowly resumed passenger services. Worshipers have just started to gather in Saudi Mecca, but the kingdom has dramatically decreased the attendance of local pilgrims to 10,000, compared to the normal 2.5 million people which includes foreign travelers.
Colliers said that once the anticipated recovery begins before the end of the year, MENA’s hospitality markets will continue to benefit “from ongoing tourism initiatives, upcoming mega-projects and domestic tourism.”
“The forecast assumes faster recovery for the UAE and Saudi Arabia markets,” it said.
Given the impact of the pandemic, UAE hotels are expected to see occupancy rates fall by 29 to 50 percent this year compared to last year.
By 2021, UAE occupancy levels, especially Dubai, are expected to increase by as much as 69 percent compared to 2020.
In Saudi Arabia, the occupancy rate, particularly those located in Makkah, should increase by as much as 71 percent.