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MENA HOTELS QUARTERLY REVIEW

Q2 | 2020 QUARTER 2 2020 | MENA 2 MENA Quarterly Review | Colliers International 6 5 4 3 CONTENTS 7 7 7 7 Hurghada Sheikh Sharm El Alexandria Fujairah Khaimah Al Ras Dhabi Abu United Arab Madinah Makkah Dammam/Khobar Jeddah Saudi of Kingdom Arabia Colliers Quarterly Update , , , City, Kuwait QUARTER 2 2020 | MENA 3 MENA Quarterly Review | Colliers International 19, limited number of number limited 19, - LIMITED NUMBER OF PILGRIMS ALLOWED ALLOWED PILGRIMS NUMBER OF LIMITED YEAR THIS HAJJ FOR have announced in KSA of Hajj and Umrah Ministry The COVID due to that this year 1,000 pilgrims Only perform Hajj. will be to able pilgrims Saudi population of resident total Muslim of the out Hajj. part in to take allowed will be Arabia first years. For the below limited to pilgrims 65 will be It be will not pilgrims modern history international time in Hajj. to perform allowed WTTC LAUNCHES SAFETY STAMPS FOR STAMPSLAUNCHES SAFETYWTTC DESTINATIONSTRAVEL GLOBAL safe issued (WTTC) TravelTourism Council World & safety and to standardize health protocols travel The tourism hospitality sectors. and across measures several includes in and May launched was protocol removal of PPE and use for social distancing, measures hotels. items in of extra have received which MENA region the in Destinations & RAK. Jordan, Egypt, Dubai are Stamps , these - June and will and will June th historic historic sights. plan to reopen. plan “Go Safe Certification”, for “Go Safe Certification”, its – beaches and beaches September. The initiative includes cities 10 includes initiative TheSeptember. th 19 Pandemic. 19 - establish the confidence to tourists the confidence among the establish - COLLIERS QUARTERLY UPDATE QUARTERLY COLLIERS The Saudi Summer initiative 25 on initiative Summer started Saudi The 30 till last of experiences offering variety Kingdom, the across highlighting mountains, The Saudi Ministry of Tourism has launched has a nation of Tourismlaunched Ministry Saudi The residents to discover the drive to inspire tourism wide campaign This touristic offerings. and Kingdom’s cultural from the sector to recover tourism the to help is expected COVID KSA LAUNCHES LAUNCHES KSA SUMMERS SAUDI TO KINGDOM THE IN INCREASE TOURISM travel to the emirate ahead of emirate ahead to the travel certified. Go Safe hotel to be firstthe was W , DHABI HOTELS DHABI Tourism have of Culture and Dhabi’s Department Abu a new certification out rolled high able to achieve are attractions which hotels and is intended certification Thestandards. and safety health to re NEW SAFETY CERTIFICATION FOR ABU FOR CERTIFICATION SAFETYNEW QUARTER 2 2020 | MENA 4 MENA Quarterly Review | Colliers International pandemic, with a decline of 4% and 2% y recovery. The industrial hub, Dammam/Khobar has been least affected by the large domestic performance, although, the Kingdom Saudiof Arabia is expected benefitto itsfrom The continued impact of theCOVID KINGDOM OF from from changein branded supply highlights percentagethe The adjacentexhibit Year Hotel Supply of BrandedKeys)(No. Hotel KeyPerformance Indicators (Year section. analyzed markets in this respectivethe of each Legend Source: Colliers International Colliers Source: Note: Includes Includes Note: onlybranded hotel supply; considers potential cancellations and delays Source: Colliers International % Decrease vs. vs. 2019Q2 % Decrease vs. Q2 2019% Increase No Change No vs. 2019Q2 Q2 Q2 2019 Q2 – 50,900 on 2019 to Change (%) Change (%) Change Occupancy - Riyadh Year % Change in Supply Year%Change in ADR Q2 2020 in market and Q2 2020 Q2 Jeddah 52,900 Madinah Makkah Dammam/Khobar Jeddah Riyadh Madinah Makkah Dammam/Khobar Jeddah Riyadh Dammam/Khobar Madinah 0.0% Jeddah 4.9% FY 2020 FY 57,000 initiatives such as Summer Seasons, on its road to - on - YearChange) YTD YTD 2018 +10% - +8% +1% ------12% 3% 8% 5% 6% 5% 6% Makkah 4.7% - 19 pandemic has led to marketwide drops in FY 2021 FY Makkah 64,000 YTD YTD 2019 4.7% Riyadh - +11% - - +9% +4% - - - - - 11% 16% o 9% 2% 2% 8% 9% - y in occupancy and ADR H1 for 2020. Madinah YTD YTD 2020 FY 2022 FY 74,000 ------38% 40% 45% 32% 46% Al Khobar 3% 4% 4% 7% 2% 4.8% of 44%H1 in 2020. resultinga y in however, followeda similardemandpattern, 70%compared toH1Madinah 2019. resultinga reducedinRevPARof Makkahwasthe hit hardestmarket, Highlights applied to necessary business travel. business necessary to applied dueto lenient amore restriction compared to H1This 2019.isin part recordedsingle H1 2020 better thandrivenmarkets leisurein andDammam/Khobar, havefared Commercialhub’s,as Riyadhsuch duringthis period. influenceon constructiontimelines pandemicis expectedto havean the durationof the COVID However,it isimportantto note that CAGR of12% from2020to 2022. The supplyis expectedto growat a than expectedQ1 in2020. FY 2020.This is 4,900keysfewer 57,000keysin theby principalcities expected an in resulting openings, Multiplehaveproperties delayedtheir Outlook . Both occupancyandADR. wasableits to retain ADR, - o digitdeclines - y RevPAR decliney - 19 QUARTER 2 2020 | MENA 5 MENA Quarterly Review | Colliers International he t he Q4, t r on the g during during to be a decline d e 19, many tourist tourist - decreases t decreases l durin to COVID-19. to COVID-19. of Q2, the e have ts have ce international , international st indicato du ntry slowly opening ntry slowly half be t recovere e 15 for hospitality for hospitality d re-opening flight cou d he double digi double t 19 pandemic is expected pandemic is expected 19 an - tels being in tels being closed d the he UAE continu he t of internationa ho ers l be r, performan has no s has ith pancy pancy levels. in d in 2020. hospitality in season ak hospitality pe tels occu tourist deman tourist UAE, wil recovery market. the in COVID The on hotel an influence to have openings during this period. there have that indicated Operators in openings delays in hotel will be 2020. routes from Jun routes offering period. this summer With the the . Outlook market is expected the in supply The 11% at a CAGR of to increase will and 2022. This2020 between keys 26,000 an additional introduce Highlights performance 2020, overall has In Q2 UAE, the decline across to continued quarter. first the of trend the following Ho affected adversely marke hospitality The experience in its board first month and a markets have experienced of 20% to 50% in RevPAR. Howeve deman Even w Even 0% 2% Fujairah Fujairah Ras Al Khaimah 6% 12% 14% 36% 13% 29% 28% 11% 14% 20% ------133,800 YTD 2020 YTD FY2022 Fujairah 18% 2% 2% Sharjah 11% 11% 11% 10% 13% 15% - - +0% ------+10% YTD 2019 YTD % potential cancellations and delays and cancellations potential Dubai 12 120,500 FY2021 1% 3% 5% 7% 7% 2% 17% ------+4% +2% +3% - % Ras Al Khaimah YTD 2018 YTD 0 Year Year Change) Abu Dhabi Abu - on - 107,700 takes into accountinto takes FY FY 2020 Sharjah Abu Dhabi Sharjah Ras Al Khaimah Fujairah Dubai Abu Dhabi Sharjah Ras Al Khaimah Fujairah Dubai 103,000 Q2 Q2 2020 Abu Dhabi Abu 2019 Q2 vs. ADR Year % Change inYear % Supply - Occupancy Dubai Change (%) Change (%) on Q2 2019 and Q2 2020. 92% of this new supply opened in Dubai. Most of Mostthese of Dubai. in opened supply new of this 92% Q2 2020. and Q2 2019 of COVID to the outbreak Due first Q1 of the 2020. in half were openings delays. faced have 2020 in to open scheduled developments hotel A total of 8,100 quality branded hospitality keys have entered the market between the market between entered keys have hospitality branded quality 8,100 of total A UNITED ARAB ARAB EMIRATES UNITED – 94,900 Q2 Q2 2019 No Change No Change % Increase % Increase 2019 Q2 vs. % Decrease Q2 2019 vs. Note: Includes only branded hotel supply; supply; hotel branded only Note: Includes Source: Colliers International Colliers Source: Source: Source: Colliers International Legend change in branded supply supply branded in change in to from 2020 Q2 Q2 2019 each of the respective in this markets analyzed section. The adjacent exhibit adjacent The the percentage highlights Year Hotel Supply (No. of Branded Hotel (No. Keys) of Branded Hotel Supply Key (Year Indicators Key Performance QUARTER 2 2020 | MENA 6 MENA Quarterly Review | Colliers International second Quarter of 2020. Egyptian market, as most markets experienced occupancies of below 10% in the and in Egypt. Q2 2020YTD is marked by significant declines in demand the for COVID EGYPT Source: Colliers International Colliers Source: Note: Includes Includes Note: onlybranded hotel supply; Source: Colliers International from from changein branded supply highlights percentagethe The adjacentexhibit Year Hotel Supply of BrandedKeys)(No. Hotel KeyPerformance Indicators (Year section. analyzed markets in this respectivethe of each Legend % Decrease vs. vs. % Decrease vs. Q2 % Increase No Change No Q2 Q2 2019 Q2 – 81,900 on 2019 to - Change (%) Change (%) Change Occupancy 19 continues haveto a marked impact on the hospitality industry globally - Year % Change in Supply Year%Change in ADR vs. vs. Q2 Q2 2019Q2 Q2 2019Q2 Cairo 2020 in 2019 Q2 2020 Q2 81,900 Hurghada Sharm El Sheikh Alexandria Cairo Hurghada Sharm El Sheikh Alexandria Cairo Alexandria takes takes into account FY 2020 FY 83,100 Alexandria Sharm ElSheikh Sharm 0 - on % - YearChange) YTD YTD 2018 +26% +32% +14% +16% +49% +12% +6% +6% FY 2021 FY potential potential cancellations and delays 85,800 YTD YTD 2019 +39% - - - Hurghada +2% +8% +7% +9% 37% 20% 23% Cairo 0% Hurghada YTD YTD 2020 FY 2022 FY 88,700 0% - - - - +5% - - - 50% 52% 49% 54% 6% 2% 4% Sharm El Sharm Sheikh 0% declinein resultedmanyforced overin2020. 50% H1 This has 2020,resultingin ay experiencedoccupancieslowin Q2 Sharm ElSheikhandHurghadahave The leisurethemarketsin Red Sea, Highlights H1 2019playsafactor. competitiveinflationto rate compared half2020,however of the more recorda growthADR in inthe first Alexandriamarketis theone only to Hurghada,respectively. the marketsofSharmElSheikhand supplyin the Egyptianmarkets. 62%of the forthcomingbranded andSharm ElSheikh accountfor The RedSea marketsHurghada of onunder projectsconstruction. delaysdueto of the impactCovid forthcomingsupplymight experience marketbythe 2022. full year The expectedto openin the Egyptian An additional6,000keysare Outlook RevPar of 55%and52% in - o closures - y declineof y and a - 19 QUARTER 2 2020 | MENA 7 MENA Quarterly Review | Colliers International - 19 is expected is expected 19 - 52% amongst the amongst 52% 19 on on market. 19 the - - the supply key the supply across the 45% 45% to - year year of declines RevPAR - result, result, on - markets, followed Kuwait by markets, City. followed Both Kuwait Both Kuwait Muscat City and growth a supply of over recorded and H1 2020. 10% H1 2019 between As a 7% compared markets increased by year. last same period to the were that openings noting is worth It to the Q2due 2020 delayed during of COVIDimpact Outlook are keys 35,000 An additional key markets the in to open expected average an 2022, representing by of 6%. Thenegative yearly increase COVIDof the impact for hotel openings. in delays to result 33% total of the Muscat accounts for key within these supply forthcoming Highlights these markets Performance in H1 decline in 2020 to continued COVID the impact of following the in resulted this Consequently, 19. year between markets. % 1 Manama 8% 11% 41% 45% 42% 38% 10% 13% 14% Amman ------35,000 YTD 2020 YTD FY FY 2022 7% 6% 1% 6% 1% 4% ------+3% +11% YTD 2019 YTD Amman 31,000 potential cancellations and delays and cancellations potential FY FY 2021 5% 5% 9% 3% 4% - - - - - +4% +5% +3% YTD 2018 YTD Muscat Year Year Change) - on - 29,000 takes into accountinto takes FY FY 2020 Manama % 10 11% Muscat Kuwait Manama Muscat Amman Kuwait City Manama Muscat Amman Kuwait City 25,000 Q2 Q2 2020 Kuwait City 2 2019 2 2019 Q2 2019 vs. Q vs. ADR Year % Change inYear % Supply - Occupancy Change (%) Change (%) on

– 23,400 Q2 Q2 2019 No Change No Change % Increase % Increase Q vs. % Decrease vs.

Legend change in branded supply supply branded in change in to from 2020 Q2 Q2 2019 each of the respective in this markets analyzed section. The adjacent exhibit adjacent The the percentage highlights Year Hotel Supply (No. of Branded Hotel (No. Keys) of Branded Hotel Supply Key (Year Indicators Key Performance Note: Includes only branded hotel supply; supply; hotel branded only Note: Includes Source: Colliers International Colliers Source: Source: Colliers International Colliers Source: A total of 1,700 quality branded hospitality keys have entered the respective the respective entered keys have hospitality branded quality 1,700 of total A accounted both cities Kuwait and Muscat 2020. H1 and 2019 H1 markets between markets. these in supply of the new for 74%

AMMAN KUWAIT CITY, MANAMA, MUSCAT, MANAMA, MUSCAT, CITY, KUWAIT 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]

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