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MENA HOTELS QUARTERLY REVIEW

Q1 | 2020 QUARTER 1 2020 | MENA 2 MENA Quarterly Review | Colliers International 7 7 7 7 6 5 4 3 CONTENTS Hurghada Sharm ElSheikh Alexandria Fujairah Ras AlKhaimah AbuDhabi United ArabEmirates Madinah Makkah Dammam/Khobar Jeddah Saudi of Kingdom Arabia QuarterlyColliers Update , , , City,Kuwait QUARTER 1 2020 | MENA 3 MENA Quarterly Review | Colliers International . temporarily suspendedtemporarily 19 PANDEMIC GCC UPDATE GCC PANDEMIC 19 - ANNOUNCES RELIEF ANNOUNCES DHABI ABU INDUSTRY TOURISM FOR INITIATIVES municipalityandalltourismsuspended Dhabi hasAbu restaurants,with thethis, 2020.Alongfor year the fees 20% alsowill a get sectorsentertainment andtourism 2020.year forfull thereduction rental by hardestbeenhit has sectortourismand travel The to beendesignedhavelike theseinitiatives coronavirus, times.thesedifficultduring industrythe support COVID GCC thecountries outbreak,CoronavirusAmidthe touristandflights allinternationalsuspended have have the countriesinhotels GCC theSomeof visas. asare some actingwhile temporarily,closed been intourism Religiousperiod.during this centers isolation beenArabiahasalso Saudi eitherundergoing currentlyare of countries the Most thecontainto orderlockdown in complete or partial virus. of spread 19 - COLLIERS QUARTERLY UPDATE QUARTERLY COLLIERS new arrivals to the Kingdom after the launch of the new of new the launchtheafterKingdom the arrivals to new visa.tourist Chineseamongstdestinations listtheofUla tops Al travelers. Interest in the Kingdom of as aas tourist SaudiArabiaof Kingdom the inInterest new theof launch thesincepickedup destination year. of lastSeptemberin visatourism NationalTourismandCommissionfor Saudi The fromChina,UK, visitorsthat (SCTH), revealed Heritage of listtheCanadaandtopped UnitedStates , RISE IN TOURISM INTEREST IN KSA IN INTEREST TOURISM IN RISE Most hotel investors remain hopeful for a relativelyforhopeful a remain hotel investors Most the expect respondentsof46% period. recovery quick 2020. ofQ4 into begin periodrecovery PERIOD TO BEGIN IN Q4 2020 Q4 IN BEGIN TO PERIOD in thehotel investorssurveyed International Colliers COVID theon theirperspectivegetregionto MENA owners of79% hotel foundthatwas It pandemic. low todue theirhotelsclose fully orto partially decided rates.occupancy HOTEL INVESTORS EXPECT RECOVERY RECOVERY EXPECT INVESTORS HOTEL QUARTER 1 2020 | MENA 4 MENA Quarterly Review | Colliers International activities, which draw millions of people the cityto every year. with Makkah being the hardest market hit due to a temporary halt on religious Kingdom of Saudi Arabia. The Saudi hotel market experienced drop a in occupancy The COVID KINGDOM OF SAUDI ARABIA Year Hotel of Hotel Supply (No. Keys)Branded Key Performance (Year Indicators Note: Includes only branded hotel supply; considers potential cancellations and delaysandcancellations potential considers supply;hotel onlybranded Includes Note: Colliers InternationalSource: – 50,000 on 2019 - Year Year Change % Supply in - 19 19 pandemic has had significant a impact on the hotel industry the in 53,000 2020 FY FY 2020 62,000 - on - Year Year Change) FY FY 2021 72,000 FY FY 2022 83,000 compared compared period to the in same reporting a drop of in 23% occupancy Makkah was the hardest hit market, COVID due to concerns over the spread of ban on pilgrimages to the country Saudi introduced Arabia a temporary Highlights first twofirst months. the strong performance within the ADR compared Q1 to due to 2019, Madinah reported an in increase quarter, Riyadh, Makkah and Despite the low occupancy the first in occupancy for levels the quarter. first that experienced an improvement in 2019. the Riyadh only wasmarket timelines timelines during this period. to an have influence on construction the COVID However,is important it to note that CAGR16% from of to 2020 2022. The supply is expected a grow to at contributors the supply. to Makkah and Riyadh being the largest keys by the end of 2020, with KSA is expected to reach 62,000 The branded hospitality market in Outlook - 19 in in the region. 19 - 19 pandemic pandemic 19 is expected QUARTER 1 2020 | MENA 5 MENA Quarterly Review | Colliers International 19 pandemic is expectedis 19 pandemic - 19. With the UAE suspendingWiththe19. - Government restrictions might have restrictionsmightGovernment of constructionimpactonan ultimatelyprojects,hospitality of new completion thedown slowing country.thein projects declined across the UAE with manyUAE with the across declined digitdouble emiratestheindicatingof ADR andbothin decreases levels.occupancy increase8%an markethasseenThe pasttheyear. supply over in Outlook inexpectedismarket the supply The 12%CAGR at ofa increaseto will 2022.This 2020andbetween keys35,200 additionalan introduce market.thein COVID The hotelon influencehave an to period. this during openings Highlights industryoneishospitality UAE’s The ofoutbreak theby hit hardest theof COVID theat end transitincluding allflights hospitalityinternational 2020,Q1 of decline.sharpseena hasdemand hasperformanceoverall 2020, Q1 In 137,000 FY2022 potential potential cancellations and delays 124,500 FY2021 UNITED ARAB ARAB UNITED Year Change) Year - on - takes into account FY 2020 FY 109,900 101,900 Q1 2020 Q1 Year % in Supply % Change Year - on Q1 2019 and Q1 2020. 95% of this new supply opened in Dubai. These branded These Dubai.in opened supply thisofnew 95% Q1 2020.and 2019Q1 Oasis SiliconRed Radisson Marina, Dubai Plaza Crowne include openings hotel Hotel. DubaiME and A total of 7,900 quality branded hospitality keys have entered the market between themarket entered have keys hospitality branded quality 7,900totalof A – 94,000 Q1 2019 Q1 Note: Includes Note: Includes branded only hotel supply; Source: Source: International Colliers Year Hotel Supply BrandedKeys) (No. Supply Hotelof Hotel Key Indicators(YearPerformanceKey QUARTER 1 2020 | MENA 6 MENA Quarterly Review | Colliers International providing facilities for quarantine. Despite this, the hospitality industry continues to support effortsmedical by COVID EGYPT Note: Includes only branded hotel supply; takes into account potential cancellations and delaysand cancellationspotential accountinto takes supply;hotel onlybranded Includes Note: Colliers InternationalSource: Year Hotel of Hotel Supply (No. Keys)Branded Key Performance (Year Indicators – 81,900 on 2019 - 19 19 has had a drastic impact on the hospitality industry globally and Egypt.in - Year Year Change % Supply in 81,900 2020 FY FY 2020 84,600 - on - Year Year Change) FY FY 2021 87,000 FY FY 2022 88,300 Hurghada Hurghada Markets. Alexandria, Sharm Sheikh El and an average drop of 24% across the shift in in occupancy Q1 2020, with have experienced significant more a dependence on the leisure segment The markets a withhigher Highlights experienced experienced improvement in rates. Alexandria hotel industry reduced demand in the Q1 2020, achieve ever higher rates. Despite evidenced byto the ability markets Mediterranean destination is Alexandria’s growing popularity as a supply supply the Egyptian in markets. 62% of the forthcoming branded and Sharm Sheikh El account for The Red Sea of markets Hurghada on projects construction. under delays the impact due to Covid of forthcoming might supply experience market by the year full 2022.The expected to in open the Egyptian An additional 6,000 keys are Outlook - 19 QUARTER 1 2020 | MENA 7 MENA Quarterly Review | Colliers International - 19 - year year - on - AMMAN 19 has now thenow 19become has - year RevPAR declines of between of declinesRevPAR year - respective markets will increase by by increasemarketswill respective keys 33,500 by reaching 33%,thus 2022.ofend significantly impact the markets’theimpact significantly in year This resultedperformance. on markets.the amongst33%to17% supplyhaslast the year, Over Manama Notably, 5%.by increased marketsbeenthehave Ammanand new any witnessednot havethat opening.hotel Outlook spreadthetheofof containmentThe COVID This markets.of theseeachinfocus on impacthave anto expectedis in resultingtimelinesconstruction openings.hoteldelaysfor potential projectsColliersthat 2020,Beyond thein hotelsupplybranded total Highlights a recordedmarketstheEach of with performanceJanuarystable year digitsinglemostly change.RevPAR of February;monththe in Beginning COVID ensuingthehowever, to beganpandemicglobal year in the respective markets. Somemarkets. therespective in year - 33,500 FY 2022 FY on - 30,500 potential potential cancellations and delays FY 2021 FY Year Change) Year - on - 27,100 takes into account FY 2020 FY Muscat. , MANAMA, MUSCAT, MANAMA, MUSCAT, CITY, KUWAIT 25,200 Q1 2020 Q1 Belinn - Year % in Supply % Change Year - on key hotel openings in 2020 include JW Marriott Muscat, Royal Tulip Muscat andMuscat Tulip JW Royal Marriott Muscat, in 2020 include openings hotelkey Swiss A total of 1,200 keys have opened year opened keys have 1,200totalof A – 24,000 Q1 2019 Q1 Year Hotel Supply BrandedKeys) (No. Supply Hotelof Hotel Key Indicators(YearPerformanceKey Note: Includes Note: Includes branded only hotel supply; Source: Source: International Colliers Source: Source: International Colliers FOR MORE INFORMATION

Christopher Lund Saqib Jafri Head of Hotels | MENA Region Associate Manager | Hotels MENA Region +971 55 899 6110 +971 55 769 9797 [email protected] [email protected]

James Wrenn Senior Manager | Hotels MENA Region +971 55 736 6767 [email protected]