Ramadan, the Islamic Holy Month of fasting, prayer, reflection, and community, started the evening of Friday, 28 February and is expected to last until 29 or 30 March, depending on the lunar cycle.
The Holy Month is the slowest part of the year for most Middle East hotel markets, and travel comes to a near-halt as the pace of life slows and shifts to accommodate participants’ fasts. While Middle East hoteliers have historical trends to prepare for this slowdown, Ramadan’s annual shift on the calendar has pushed the Holy Month further into overlap with the Middle East’s high season.
Performance ahead of Ramadan
Despite the shortened high season, occupancy growth in the leadup to Ramadan did not noticeably increase. Riyadh occupancy picked up as the Saudi school holidays started, but other Middle East capitals reported no change in growth trends in the weeks ahead of the Holy Month, suggesting that there wasn’t a last-minute rush.
There was a noticeable shift in travel patterns in the days leading up to Ramadan, however. The Holy Month’s start is reliant on the sighting of the crescent moon. Tracking the lunar cycle can predict the start of Ramadan within 1-2 days, but the crescent moon might be sighted on different days in different countries, leading to staggered or uncertain start dates. As a result, travel begins to slow ahead of the expected start date.
Occupancy declines vary by market type as well. Capital markets, which are often corporate hubs and more reliant on business or government demand, tend to report larger occupancy declines during Ramadan.
Markets with a larger international or leisure demand base, such as Dubai or Abu Dhabi, tend to maintain occupancy a bit better as non-Muslims may still choose to travel to those destinations.
Umrah’s positive impact
There is one major exception to the Ramadan demand slowdown. Pilgrims from around the world flock to Makkah and Medina to complete Umrah during the holiest month of the Islamic year, dramatically increasing market occupancy.
Ramadan lasts between 29 and 30 days, with the expected 2025 end date near 29 March. Over the next few weeks, markets will do well to maintain occupancy in line with 2024, as the comparison is like-for-like with Ramadan 2024.
Looking ahead
Looking with our Forward STAR data, occupancy on the books reveals that Makkah, unsurprisingly, can expect the highest occupancy, while internationally popular Dubai and Abu Dhabi closely follow.
Encouragingly, most markets expect occupancy at or just ahead of 2024 levels for the remaining days that the 2024 and 2025 holidays overlap. This could point to increased international inbound demand in the Middle East, a sign that the region’s many plans to increase tourism and grow as international destinations is working.
*Analysis by Kelsey Fenerty.
About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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