A survey By: Colliers International
As the COVID-19 outbreak evolved this past month, we conducted a survey with hotel investors in the Middle East and North Africa to get their perspective on the current situation with clients and to get their perspective on the current situation, how they have responded to the pandemic and their thoughts on the market moving forward.
Reactions to the covid-19 crisis
Colliers International found that 79% of hotel owners have decided to partially or fully close their hotels due to low occupancy rates. Some properties in the region are being used for quarantine and healthcare related purposes. Nearly 29% of respondents with operational hotels have seen this within their properties.
When it comes to owners with hotels under construction or with development plans underway, we found that 65% have no plans to scale back. However, 35% of respondents have reservations about proceeding with development plans.
Cooperation between existing hotel owners & operators
2020 Occupancy & recovery
Hotel occupancy for 2020 is expected to be severely affected as illustrated by the approximate 30% drop in occupancy in the MEA region seen in March of this year, as reported by STR. Our research revealed that 39% of investors believe that the occupancy for the full year 2020 will be between 21-40%, while 33% believe that the occupancy will be between 41-60%, with regards to their respective markets.
The majority of hotel owners and investors have a positive outlook on the future of the hospitality industry. Overall, 52% of respondents expect to see development opportunities in the medium term. 39% would like to focus on refurbishment and property upgrades, 26% on acquisitions and 22% on restructuring. Only 7% of the respondents stated that they do not see any opportunities in the medium term. When it comes to expected changes to the industry in the long term, over a quarter of the respondents (26%) believe that the market will get back to “business as usual”, while the vast majority (74%) agree that the industry must be better prepared in the future for a similar type of event by implementing better crisis management planning.