Sunday, June 16, 2019

Kuwait


Kuwait rates remain robust in tough times
April 2019 941

ACCORDING to Colliers MENA Hotel Market Full Year Review 2018, approximately 1,000 keys entered the Kuwait market in 2018. This resulted in a 4 per cent annual increase in supply, which is below the expected average annual supply growth of 14 per cent between 2018 and 2021.

“The expected growth in supply has decreased due to the delays in both the Swiss Belboutique Bneid Al Gar and Swiss-Belresidences Al Sharq that were expected to open in 2018,” Christopher Lund, head of hotels, Colliers International MENA, tells TTN.

In 2017, Kuwait City had approximately 6,432 branded hotel keys. This number grew to 6,770 in 2018 and to 6,970 as of March 2019. The number of keys is expected to grow further to 7,656 by the end of the year, and 8,700 by end of 2020.

Hilton Worldwide will be introducing the 158-key Conrad Hotel and the largest Hilton Garden Inn in the EMEA region with 430 keys. AccorHotels is expected to introduce the 160-key Novotel Sharq. Other major hotels include the Swiss Belboutique Bneid al Gar with 58 keys and the Swiss-Belresidences Al Sharq with 68 apartments.

At the close of 2018, the Kuwait City hotel market registered the highest annual ADR compared to some neighbouring cities.

“Kuwait has traditionally been a high rate market when compared to Manama, Muscat and Amman. Kuwait’s rates remained relatively robust even during challenging economic times,” says Lund.

“The occupancy has only seen a slight decrease between 2017 and 2018 from 54 per cent to 53 per cent. The hospitality market has been stagnant between 2017 and 2018 showing little changes in demand and supply. This trend is projected to continue in 2019, where Kuwait is expected to see a 1 per cent decrease in occupancy and a 1 per cent increase in ADR.”

Outside Kuwait City, resorts such as those in the south of the country – including those in the Khiran Project – continue to attract domestic and Saudi leisure tourists, Lund tells TTN. “To continue to increase demand for these properties, government plans to boost tourism levels by expanding the existing portfolio of demand generators in Kuwait. This should have a positive influence on the ADR and occupancy percentage of branded properties outside of Kuwait City.”

One noteworthy project to keep an eye out for would be Madinat Al Harir (Silk City), which will be linked to Kuwait City through the Sheikh Jaber Causeway (a project also currently under construction). This megaproject composed of four quarters, will offer facilities such as residences, hotels, sports, medical and environmental facilities.

Meanwhile, the $12 billion airport project is expected to boost capacity to 25 million passengers a year by 2022. The ease in congestion will allow Kuwait to continue to grow as a destination for business and leisure travellers as well as grow the Mice sector in the country. These will all have positive effects on hotel performance over the medium and long term.

The up and coming tennis complex is certainly one of a kind in the Middle East and aims to put Kuwait on the map with regards to international tournaments. The project is estimated to attract 11 million visitors a year upon completion. This will open a new market for leisure tourists beyond the traditional source markets of the GCC and MENA regions. “Opportunities in this space include family resort destinations that can attract families from across the world that can visit the sport complex and other destinations across the country.”




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