Commenting on the survey, Yousef Wahbah, MENA Head of Transaction Real Estate at EY said:

“May 2014 was another good month for the MENA region’s hospitality industry. As we move into the summer months, we can expect to see slight decreases in occupancy rates, largely due to the change in climate, decrease in visitors and slowdown from the Holy month of Ramadan. However, despite these factors, a number of key markets have still demonstrated stable growth across Key Performance Indicators (KPIs).

In May 2014, Dubai’s hospitality market witnessed a slight drop, with overall average occupancy decreasing by approximately 3.2% percentage points (pp) over last year. This was coupled with a slight drop in ADR of 1.2% and decrease in RevPAR by 2.5%. This is mainly due to the additional supply of over 3,400 new branded hotel rooms, all within 4 and 5 star hotel segments which have been added to Dubai’s hotel supply over the past year.

May 2014 performance slowed in comparison with April, which is in line with the city’s typical summer season. Occupancy fell by approximately 5.0% pp month on month, while average room rates decreased from US$327 in April 2014 to US$244 in May 2014.

In the wider MENA region, key hospitality markets witnessed positive increases in May 2014, including Manama, Amman and Doha.

Manama recorded an increase in RevPAR of approximately 36.3% in May 2014 when compared to May 2013. This increase is mainly due to an increase in average occupancy from 34.0% to 46.0% during the same period. This was coupled with a slight increase in ADR of 2.4%. These increases can be largely attributed to a number of conferences held in Manama and in May, the city hosted events for the Petrochemicals, Property, Construction and Architecture industries.

Doha’s hospitality market continues to record positive growth in 2014, with RevPAR increasing by approximately 18.7% in May 2014 when compared to the same period last year. This increase in RevPAR was mainly attributed to a rise in average occupancy from 68.0% in May 2013 to 79.0% in May 2014. In addition, Doha’s ADR saw an increase of 3.3% in May. These increases can be attributed to the number of events and conferences held in Doha in May, including Trans Middle East, World Stadium Congress and the Doha Forum.

Amman’s ADR increased by approximately 18.0% from the same period last year, jumping from US$155 in May 2013 to US$283 in May 2014. This resulted in an increase in RevPAR of 29.3%. Additionally in May, Amman’s overall occupancy reached 70.0%, a 6.0% pp increase. These increases can be credited in part to the conferences Amman hosted in May, which included The Soccerex Asian Forum, Investing in the Levant, Sofex Trade Show, and the Special Operation Forces Exhibition.

Makkah and Sharm El Shaikh, however, saw a decline in their hospitality market performance in May 2014 when compared to the same period last year.

Makkah’s hospitality market witnessed a decrease in RevPAR, from US$80 in May 2013 to US$58 in May 2014, mainly due to a drop in ADR by approximately 28.4%. The decrease in ADR can be attributed to the hotel operators’ pricing strategies in order to attract visitors to the Holy City.

Sharm El Sheikh’s hospitality market has continued to suffer in 2014, compared to the same period last year. ADR increased from US$46 in May 2013 to US$53 in May 2014. However, the increase in ADR was offset by a drop in average occupancy of 18.0% pp during the same period. This resulted in a decrease in RevPAR of 19.5%.

The MENA region’s hospitality industry remained largely stable in May 2014, despite small declines in a few markets. It is expected that the industry will see a slowdown in the summer months, as it does every year, however we remain positive about the MENA hospitality market as a whole and continue to predict strong growth through the rest of 2014.”