Accor’s hospitality portfolio across the Gulf region is displaying divergent performance trends, with significant differences emerging between resort properties and urban city hotels. According to Duncan O’Rourke, the company’s regional CEO overseeing premium, midscale, and economy brands throughout the Middle East, Africa, and Asia Pacific, leisure-focused resorts are capitalizing on returning vacationers and achieving rate improvements, while city-centered properties face considerable headwinds.
UAE city hotels have implemented substantial rate reductions ranging from 15% to 20% during August and September to maintain occupancy levels near target ranges. This strategy reflects the challenging environment for urban properties, which traditionally rely more heavily on business travel than their resort counterparts. The disparity between resort and city hotel performance has created what O’Rourke characterized as a split market, with weakness concentrated specifically in UAE urban properties.
The performance gap extends beyond the emirates into Saudi Arabia, where Accor’s properties in Jeddah and Riyadh are tracking slightly below year-over-year figures due to softness in corporate business activity. The broader pattern indicates that leisure travelers have demonstrated greater willingness to return to Gulf destinations compared to business travelers, whose travel patterns remain constrained. This distinction has created differential impacts across Accor’s portfolio depending on each property’s positioning within the market.
The regional geopolitical environment, including the U.S.-Iran conflict, appears to be influencing travel behavior patterns and contributing to the bifurcated market dynamics. While resort destinations benefit from leisure demand recovery, city hotels dependent on conference business, corporate meetings, and business travel continue to face pressure on both occupancy and rate achievement.
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