Monday, Jul 06, 2015

Abu Dhabi: The hotel establishments price index decreased 17.8 per cent during March 2015 compared with February 2015 on the back of a 20.2 per cent fall in the hotel room rates index during that period, according to Statistics Centre — Abu Dhabi (SCAD).

In a statement issued on Monday, SCAD said that the hotel price index slid 0.7 per cent in March 2015 compared with March 2014 as the hotel room rates index fell 1.5 per cent during that period.

Hotel apartments room rates index also fell 7.4 per cent during March 2015 compared with February, but showed an increase of 2.2 per cent during the same month compared with March 2014.

Falling room rates pushed hotel revenues down 11.1 per cent in March over February, SCAD said, though revenues registered an increase of 10.4 per cent when compared to March 2014.

Analysts said that though the drop on a month-to-month basis was relatively large, the figures were not good indicators of overall performance, with the annual comparison being more relevant.

“I’m not surprised by the annual figures because we had expected to see softening of average prices and occupancy rates. The stronger dollar means that Abu Dhabi and Dubai are becoming more expensive for tourists from countries affected by the depreciating euro,” said Nikola Kosutic, research manager at research firm Euromonitor International.

He added that the supply side was performing well in terms of the offerings for guests, but the demand side was slowing demand as a result of the euro.

Europeans account for a large share of visitors to the emirate, with Germany alone being one of Abu Dhabi’s largest source markets.

“The outlook, however, is positive, especially looking at the next five years in the period leading up to the Expo 2020. I think on a yearly basis we will see growth because it’s driven by supply.

Plus, it’s mostly Europeans who are affected by the euro. The largest guest market for Abu Dhabi is still domestic so we’re talking about Emiratis and expats,” Kosutic said.

He further said that there are also countries benefiting from the exchange rate such as Australia, India, and China, with the latter already being a large source market for the emirate.

Meanwhile, Chiheb Ben-Mahmoud, head of hotels and hospitality at Jones Lang LaSelle, said that the falling rouble was another factor behind the drop in demand. “Abu Dhabi has been marketed a lot as a cultural destination, but so far, there is relatively limited offering in that space. There’s a lot of offering in terms of leisure but in terms of culture and museums, the destination is still not up to what has been marketed,” he said, adding that the outlook was positive once more attractions are finalised.

By Sarah Diaa Staff Reporter

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