Effects of COVID-19 on MENA’s Hotel Market
Tourism is big business — for some economies, it makes up a considerable chunk of their GDPs. But it is also one of the hardest-hit sectors during COVID-19, with a significant blow dealt to the hotel and hospitality industries.
In this survey conducted after the outbreak of the COVID-19 pandemic, Colliers International assessed the prevailing sentiment across the hotel industry in the Middle East and North Africa. Owners of existing properties in the region, as well as those that have invested in hotels still under construction, reverted with their perspectives on the impact of COVID-19 on the hotel industry and the outlook for the hotel industry after COVID.
Of those surveyed, a substantial percentage held investments in the hotel industry in the UAE, with the remaining majority with investments in the hotel industry in Saudi Arabia and the hotel industry in Egypt. Drawing on the responses of these major players across the hotel industry in the Middle East and North Africa, this survey forms an analysis of the hotel industry in 2020 as well as the hotel industry’s forecast for 2020.
A large fraction of respondents — nearly 80% — were forced to either fully or partially shut down due to low occupancy rates across hotels, while some properties were appropriated into temporary quarantine and healthcare facilities. Salary cuts, forced leaves, heavy layoffs, and full or partial closure of hotels, were some of the common reactions across the region’s hotel industry during COVID.
But, in a promising turn, most investors with hotels still under construction do not intend to scale back development during the pandemic. While hotel occupancy for 2020 has fallen severely, investors remain optimistic about the hotel industry’s recovery after COVID-19 and the hotel occupancy forecast post COVID.
In fact, a large subset of respondents shares this positive outlook for the region’s hotel industry after the pandemic and the hotel investment market at large. Most expect the impact of COVID-19 on travel and tourism in the Middle East, and the subsequent hit to the hotel industry during COVID, to shift gears into recovery by the last quarter of 2020. But many agree this will not be possible without better crisis management across the hotel industry.
This survey outlines the effects of the pandemic on the region’s hotel market, presents an overview of the responses and actions of existing hotels, those under construction, and those with development plans for future hotels, as well as addresses the market’s sentiment towards occupancy and recovery.
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