Oversupply in some corners of the world is driving down hotel rates and creating future bargain basements for event organisers who know where to look. And the Middle East is one of the best examples, according to hotel industry expert Sarah Duignan of hotel data analysts STR.
Speaking at hotel brand giant AccorHotels’ annual customer-facing meetings event, the Global Meeting Exchange in Montreux, Duignan revealed where strong hotel development pipelines will increase competition and deliver reduced rates.
She said rates in the Middle East are already down by five per cent and will reduce further because demand cannot keep up with supply, whereas the rates in Europe will go up with demand currently increasing at twice the rate of supply although the UK pipeline promises an additional room stock of 22 per cent. Dublin currently boasts the highest hotel occupancy at 84 per cent but still not the highest average room rate – that ‘accolade’ belongs to Paris with Zurich close behind.
She said: “There is a bit of a race to the bottom in terms of rate in the Middle East with UAE hotel supply due to increase by 49 per cent.” In addition, supply is set to increase in Saudi by 73 per cent, Dubai by 58 per cent, Doha by 74 and Riyadh by 56 per cent.”
Hotel revenues per room are also going down in North America because supply is outstripping demand - the hotel pipeline will increase room stock by 12 per cent! Singapore, Hong Kong and Taipei have the highest rates in Asia but Oceania rates (Australia and New Zealand) are falling because of increasing supply. Auckland will increase hotel room supply by 45 per cent and Sydney by 33 per cent which should reduce rates, said Duignan . “Europe has been on a roller coaster and rates peaked in 2017”.
She said better supply has depressed rates in Barcelona by 4 per cent while Moscow rates increased by 45 per cent around the FIFA World Cup. However, UK hotel supply will increase by 22 per cent, Germany by 15 per cent with Frankfurt 20 per cent, London 27 per cent and Warsaw 26 per cent. So rates should be expected to soften. She said: “Belfast is really good value on the back of huge new supply, Amsterdam is a hot market and Cologne is one that is regenerating. What will happen with the room supply after Expo is the big question in Dubai.”
She added that huge investment in luxury rooms is continuing in the Middle East while there is more midscale development in the UK while there will be good rates to be had in Houston, Phoenix, Nashville and the USA’s tertiary cities.
AccorHotels’ GME attracted 160 attendees, including 50 participating hotels.
Written By
James Lancaster
AMI editor James
Lancaster is a familiar face in the meetings industry and international
association community. Since joining AMI in 2010, he has gained a reputation
for asking difficult questions and getting lost in convention centres. Proofer, podcaster, and panellist - in his spare time, James likes to walk,
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