Middle East Q3 2021 Hotel Performance Update

Several countries in the Middle East have been racing ahead of the rest of the world in vaccination rollout. The United Arab Emirates is a prime example with more than 86% of its population fully vaccinated as of 25 October 2021, according to Our World in Data.As vaccination rates improve, restrictions for international travel continue to be eased and demand in the hotel sector continues to improve toward pre-pandemic levels. In September, Middle East hotel occupancy was 58.6%, which was the region’s highest level since February 2020 and 93.9 % of the 2019 comparable (62.4%). Those levels reflect a consistent upward trend as the region’s occupancy was 50.7% in July and 55.9% in August, which represented 83.8% and 88.6% of 2019 comparables, respectively.

Average daily rate (ADR) is even further ahead, coming in at US$112.96 in September (99.1% of the 2019 comparable). That was actually slightly below July (US$122.73) and August (US$116.52) on an absolute basis. In July, ADR was 103.9% of the 2019 comparable, which was the highest index of the pandemic-era.

Class impact

When looking at hotel classes in the Middle East, it is clear that the lower end of the market is further ahead in occupancy recovery.

The combined Midscale/Economy segment matched its Q3 2019 occupancy during the third quarter of 2021 (65.7%). Upscale/Upper Midscale reached 59.7%, or 94.9% of 2019 levels. Luxury/Upper Upscale showed occupancy of 49.2% or 81.4% of 2019 levels.

Higher occupancies haven’t translated to higher room rates though, as the Q3 Midscale/Economy ADR of US$46.83 was just 90.4% of the 2019 comparable.

Luxury/Upper Upscale ADR (US$171.10), on the other hand, was 94.7% of the 2019 comparable.

Key countries

If we look at key countries in the region, some are already outperforming 2019 comparables recently, while others are nearing their pre-pandemic levels.

Q3 hotel occupancy in Qatar was 68.8%, which was an improvement of 11.4% from Q3 2019.

The UAE reached 61.4% occupancy during the latest quarter, which was 92.0% of the 2019 comparable (66.7%).

Saudi Arabia has improved with Q3 occupancy at 41.1% but was still further away from 2019 levels.

ADR, as mentioned, was already ahead of 2019 levels for most of these countries during Q3: UAE (+8.3%), Qatar (+6.0%) and Bahrain (+0.1%).


As the months progress and more international travel materializes, hotels in major markets reliant on corporate business and the MICE segment will see greater balance in their demand mix. Over the course of the pandemic, domestic demand has been the primary driver of business, which is why recovery has been uneven when looking at the various hotel types in a market.

About STR

STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.

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