Softer Moroccan currency could spark foreign investment in hotel area

Efforts by Morocco’s central bank and its government are expected to drive investment in real estate, with the hotel sector likely to benefit.

With the country suffering from a lack of hotels, observers predicted a “flight to branding” that could pave the way for the global flags.

The comments came as STR reported that Morocco’s hotels had registered the first RevPAR increase for a January month since 2014, driven by the number of visitor numbers generated during the FIA Formula E Championship race in Marrakech, as well as Marrakech Marathon.

Average hotel occupancy rate in Morocco was up 16.3 percent to 54.1 percent, ADR was 28.5 percent higher to 129.16 Moroccan dirhams ($182.64) while RevPAR was up 49.5 percent to 69.9 Moroccan dirhams.

According to JLL’s Morocco 2018 report, Morocco’s central bank widened the official band within which the dirham may fluctuate to 5 percent, with a maximum daily move of 2.5 percent above or below the official rate. As part of a broader monetary reform, this move is intended to bolster the competitiveness of Morocco’s economy and will potentially position the country as a regional economic hub, and the gateway to Africa.

“If the currency softens against the [U.S. dollar] and the euro, this will effectively make Moroccan property cheaper for investors from markets denominated in these currencies and attract further foreign direct investment into the real estate sector across Morocco and, most specifically, into Casablanca,” said Craig Plumb, head of research, JLL MENA, when the report was released last month.

The country has also seen the launch of REITs, which are expected to further broaden the range of investors.