Northern African hotels deliver highest increase in global occupancy rates in 2017

The return of some form of political stability across parts of Northern Africa is helping the region to lead the way in terms of hotel occupancy growth, latest statistics from STR reveal. The global data benchmarking, analytics and marketplace insights experts reveal that the region continues to deliver the highest rates of occupancy as well as average daily room rates (ADR) and revenue per available revenue per room (RevPAR), but yields remain the weakest among all global regions.

In its round-up of Aug-2017 performance, STR says across Africa as a whole growth is being seen across all three of the key performance indicators with occupancy up+2.9% to 61.2%; ADR up +11.7% to US$99.78 and RevPAR up +15.0% to US$61.09 for the month, in comparison with August 2016. For Northern Africa the rates of growth were +7.1% to 65.3%, the highest occupancy rate across the Continent; +27.7% to $85.35 and +36.7% to $55.70, the weakest yields across all global regions with the exception of Eastern Europe’s ADR.

CHART – For long periods this year there has been a significant increase in scheduled flight frequencies in and out of Northern AfricaSource: CAPA – Centre for Aviation and OAG

The Aug-2017 performance continues a trend for the current calendar year across Northern Africa with occupancy rates up +12.4% for the first eight months of the year (versus the same period in 2016), over three times the rate of the second fastest growing region of Southern Europe (+4.0%), while ADR is up 25.6% and RevPAR up +41.2%, also three times the rate of growth at the second fastest growing region, Eastern Europe in both cases.

Across the region, Egypt was among the stand out markets in Aug-2017 with occupancy up +12.5% to 66.8%, ADR up +73.3% to EGP1,233.18 and RevPAR: +95.0% to EGP823.70. The country’s ADR has remained above EGP1,000 each month since November 2016, and rate growth has been primarily driven by Cairo, which posted an 83.8% Aug-2017 increase to EGP1,671.39 (however these figures are quite different when converted into US$ terms, with a 12.9% decline for the country and 7.6% decrease in Cairo).

CHART – After a reduction in international capacity in 2016, the Egyptian market has returned to growth in 2017 and will also exceed 2015 figures, based on published schedulesSource: CAPA – Centre for Aviation and OAG

Egypt’s occupancy levels benefitted from a 12.9% increase in demand, while supply grew only 0.4% compared with Aug-2016. Egypt’s hotels are clearly continuing to recover from security concerns in the country, and demand has grown by double-digits for all but one month in 2017.

Another of the key markets in Northern Africa is Morocco, where a proliferation in Low Cost Carrier activity is boosting regional connectivity. Across the nation occupancy actually fell -6.4% in Aug-2017 to 65.8%, while ADR increased +9.6% to MAD1,183.50 and RevPAR grew +2.5% to MAD778.21, a good yield improvement and Morocco’s fifth consecutive month of ADR growth.

CHART – Low Cost Carriers are accounting for an increasing share of capacity into Morocco with a 42.5% share of international seats for the week commencing 18-Sep-2017Source: CAPA – Centre for Aviation and OAG

At the market level, Marrakech recorded a 17.5% increase in RevPAR, driven solely by rate growth, while Casablanca was the only market that managed to increase both occupancy and ADR, resulting in +5.6% growth in RevPAR. STR analysts note that supply growth (+3.5% year to date) is affecting Morocco’s occupancy levels. Additionally, the country has 28 hotel projects in the pipeline, of which, six are scheduled to open before the end of the year, which could further dilute occupancy rates and impact yields.

CHART – The Caribbean market delivers the highest ADR and RevAPR during the first eight months of 2017 but will have been significantly impacted by Hurricane Irma and Hurricane Maria; Northern Europe has the best occupancy rate across the same periodSource: The Blue Swan Daily and STR