Hotel occupancy rate in the Middle East and Africa has fallen by some 11 percent to 66% in the past year. Egypt and Dubai, which did very well in 2007 and 2008, have recorded the biggest losses, according to a report released by the global hotel benchmark company STR Global.
Egypt recorded a 12.5% drop while the occupancy rate in Dubai fell by 30% according to the report.
Both of these countries depend heavily on tourism both as sources of income and for employment opportunities for its citizens.
In Egypt, the tourism industry is one of the country’s top sources of foreign currency. The government has been working hard to rebuild it after it was devastated following several terrorist attacks during the 1990s, most notably an attack on tourists visiting the temples at Luxor along the Nile in southern Egypt that left 63 people dead.
In January 2009, the Egyptian tourism ministry decided to exempt hotels in the country from a fee they have pay for tourism promotion in a bid to ease the financial burden on the hotels, which are currently suffering from the global economic slowdown.
In addition to tourism, which accounts for 6.6% of Egypt’s gross domestic product, money being sent home from nationals working abroad and the fees ships pay when passing through the Suez Canal provides the bulk of foreign currency entering the country.
As opposed to its neighbours, Dubai does not have an abundance of oil, and early on the government focused on developing the country’s travel and tourism sector. An example of this strategy was the decision in 1985 to establish the Emirates Airlines, which serves the double purpose of bringing tourism to the country and diversifying the small Gulf Emirate’s economy.
However, there are some “winners” in the Middle East, according to the report. For example, Beirut is continuing its quest to regain its former glory – when the city was referred to as the “the Paris of the Middle East” – with its hotel occupancy rate increased to 72%.
Two other big gainers are the Saudi Arabian capital Riyadh, and Jedda on the country’s Red Sea coast and a major way point for Muslims performing pilgrimage. Both cities recorded occupancy levels above 70%, according the report.