Hotel industry begins to revive after hitting low in September

• Text size
•  
•  

Thursday, Oct 29, 2009

Dubai The Middle East/Africa region reported mixed year-over-year hotel results in three key measurements — occupancy, average daily rate and revenue per available room — for September 2009, according to data compiled by STR Global.

"We have already witnessed a good rebound in October when compared to September numbers. Again, the situation is not that bad and we think that the market is slightly picking up. Dubai and the UAE as a whole have a good hotel infrastructure, good fundamentals to attract business and leisure travellers hence all good properties that are well located will not suffer," Ameen Hamdani, vice-president of CBRE Hotels Middle East, told Gulf News.

Dubai's average daily rate (ADR) for hotels in September dropped to $175.62 (Dh644.5), according to the latest hotel industry report for September. Dubai's ADR in September 2009 reflected an 8.3 per cent drop on the ADR for September 2008.

ADR is determined by taking the room revenue rate and dividing it by the number of rooms sold, the STR Global report explained.

In terms of revenue per available room (RevPAR) three markets showed a decline of more than 15 per cent. These markets include Riyadh with a 21.3 drop to $77.83, Abu Dhabi's RevPAR fell 16.9 per cent to $129.92 and Muscat's RevPAR decreased 15.3 per cent to $72.83.

With the summer season and Ramadan coinciding this year, hotels in Dubai made huge efforts to increase their offers in order to attract guests.

Many people, including those in the region, also scaled down their travel plans, meaning that instead of taking long-haul trips, many Gulf Cooperation Council residents changed their plans and stayed within the region.

A Deloitte report released last month showed that the Middle East enjoyed the highest revenue per available room up until July this year at $126.9, compared with markets such as Europe, the Americas and Asia Pacific.

However, in this latest report, the Middle East and Africa region in general showed mixed results when seen year-on-year in occupancy, daily rate and RevPAR, according to the STR Global report. The region's occupancy dropped 8.2 per cent from 62 per cent to 56.9 per cent. The average daily rate increased 1.5 per cent to $140.66 and RevPAR decreased 6.9 per cent from $85.91 to $80.

September data

With a fall of 6.9 per cent, September showed the lowest monthly RevPAR decline for the region since December 2008, said Elizabeth Randall, managing director of STR Global.

"However, whilst we have seen declines in RevPAR stabilise in recent months, the earlier start of Ramadan in mid-August this year benefited this month's results as business was stronger than in September 2008. RevPAR benefited from the first increase in average room rate since March 2009," Randall said.

In the Middle East region specifically, Randall said it was good to see more cities such as Amman, Beirut, Cairo, Istanbul and Jeddah all reporting monthly RevPAR increases growing on last year.

Beirut

Beirut showed increases in all three areas of occupancy, available daily rate and RevPAR while Istanbul and Cairo posted occupancy increases.

Other than Beirut, two markets reported double-digit increases in ADR — Amman rose 17.9 per cent to $134.71 and Cairo increased 15 per cent to $118.68.

However, Riyadh experienced the largest drop in occupancy year-on-year, followed by Muscat and Cape Town.

Globally, the highest occupancy, available daily rate and RevPAR for September 2009 were all in Europe.

Within Europe, the UK had the highest occupancy and the lowest ADR.

The lowest occupancy was in the Middle East and Africa region, and the lowest available daily rate and RevPAR were in the Americas.

By Suzanne Fenton, Staff Reporter

© Gulf News 2009. All rights reserved.