On the whole, in 2022, the GCC’s hotel sector continued to record increasing visitation numbers, higher ADRs and ultimately higher RevPARs. Given that this will be the first year that does not have any pandemic related restrictions, we forecast that KPIs will, by year-end, almost uniformly surpass 2019 levels. That being said, there will be headwinds for the sector to navigate, including but not limited to a slowdown in global economic growth, a strong US dollar and the materialisation of new supply. These factors will impact country and city markets by varying degrees.

In Bahrain, given the number of hotel openings in the five-star market segment, we expect that this sector is likely to see KPIs soften materially, while the wider market is expected to remain stable.

Kuwait is likely to see occupancy rates continue to improve steadily throughout the year, however, we do expect the ADRs growth to be limited.

Oman’s COVID-19 restrictions were arguably the strictest and longest lasting in the region. Given this, Oman’s hotel market performance is still very much in its recovery phase, and due to this low base, we expect strong KPIs to be recorded throughout 2023.

After the FIFA World Cup 2022, unsurprisingly, we expect Qatar’s KPIs to soften amidst the dramatically higher supply and recently announced regulatory dynamics.

The full-scale return of religious tourism will continue to drive occupancy in the Holy Cities and Jeddah. More so across the Kingdom, with the materialisation of luxury and ultra-luxury developments, we are also likely to see an uptick in ADRs. In Riyadh and Dammam, the return of corporate tourism, which forms a material part of demand in these markets, will help lift occupancy rates in these markets.

Finally, in the UAE, although we expected occupancy rates to continue to increase, we forecast that ADRs will soften over the course of the year, which will put pressure on RevPARs. The beachfront luxury segment of the market is expected to continue registering outperformance, both in terms of occupancy and ADRs.

CBRE - Middle East Real Estate 2023 Outlook-14