The biggest global climate summit of the year did not disappoint in 2022.
The annual United Nations Climate Change Conference, COP27 was Nov. 6-18 in Sharm El-Sheikh, Egypt. The past two host cities were Glasgow, Scotland — between Oct. 31 and Nov. 12, 2021 — and Madrid from Dec. 2-13, 2019.
During Sharm El-Sheikh's hosting of COP27, hotel occupancy in the market was lower than pre-pandemic levels, compared to the same week in 2019, according to STR, CoStar's hospitality analytics firm. STR also benchmarked 2021's COP26 in Glasgow to 2019 performance, while COP25 in 2019 in Madrid was benchmarked to 2018.
But hoteliers in Sharm El-Sheikh no doubt were delighted at the change in average daily rate COP27 brought this past November.
For COP25 and COP26, occupancy increased across the days of the summit on average by 2% in Madrid and 16% in Glasgow.
For Sharm El-Sheikh, on the other hand, hotel occupancy was down by 12% on average during COP27 when compared to the same dates in 2019. Occupancy ranged from a 31% decline on Nov. 18 to a 1% decrease on the summit's second night on Nov. 7. Many world leaders and notable attendees often attend only the conference’s first day.
In terms of hotel rates, Sharm El-Sheikh's hotel average daily rate increased 1,127% in local Egyptian pounds on Nov. 7 in comparison to the pre-pandemic year. Even indexed in U.S. dollars, ADR for that date increased by 732%.
Delegates attending COP27 started arriving in Sharm El-Sheikh weeks before the start of the summit as hotel average daily rate began climbing. Two weeks before the start of the conference, ADR was up 53% on Oct. 24 in local currency when compared to 2019. A week before COP27, hotel average daily rate outpaced 2019 by 181% on Oct. 31 in local currency. Both increases are notable and indicative of the Red Sea destination’s recovery.
On Nov. 18, the last day of COP27, Sharm El-Sheikh's hotel ADR came in at 718% above 2019 levels in Egyptian pounds. The lowest ADR increase during the summit was on the penultimate day of the event, Nov. 17, when it was still up 608%.
Indexed in U.S. dollars, ADR for Nov. 17 and 18 exceeded 2019 comparables by 365% and 437%, respectively.
For context on Sharm El-Sheikh's hotel rates during the summit, STR analyst Kelsey Fenerty said “in U.S. dollars, [COP27] cost on average $400 per night to attend.”
“Good to be a hotelier in Sharm right now,” she added.
According to business advisory Colliers’ Middle East and North Africa Market Forecast Report for July 2022, Egyptian leisure-oriented markets, which would include Sharm El-Sheikh, have faced tougher competition for demand across the first half of 2022.
Egypt's leisure markets “experienced a marked reduction of demand stemming from increased competition in the region as well as travel uncertainty from the key [Commonwealth of Independent States] markets. The exception here is the Hurghada market which has maintained its levels of demand,” the report said.
Hurghada is a Red Sea competitor of Sharm El-Sheikh.
Dubai, United Arab Emirates, will host COP28, the 2023 United Nations Climate Change Conference, from Nov. 30 to Dec. 12.