UAE hotel revenues likely to continue falling in 2016

Tuesday, Apr 26, 2016

Dubai: Hotel revenue in the UAE are likely to continue falling in the remaining months of this year, according to a hotel executive.

Omer Kaddouri, president and chief executive of Rotana Hotels, expects a drop of 10-12 per cent in revenue per available room or RevPAR, which is an industry measure of occupancy and rates, in the country this year compared to 2015.

In the first quarter of 2016, RevPAR was down by around 10 per cent overall in the UAE and by 6-7per cent for Rotana’s UAE properties, he said in an interview at the Arabian Travel Market in Dubai.

Occupancies and average room rates in Dubai have been under pressure over the last year mainly due to an increasing supply of hotel rooms and a strong US dollar.

According to a report from research firm STR Global, Abu Dhabi hotels saw average room rates and RevPAR in March this year decline 4.9 per cent and 1.1 per cent respectively. Occupancy, however, was up 4 per cent to 83.3 per cent.

Kaddouri said that he is satisfied with the occupancy levels in the UAE. “I am happy with how the occupancies are doing considering everything that is happening today in the region: the lower price of oil, the Russians aren’t coming, currency fluctuations and the 10,000 rooms coming into Dubai and 4,000 into Abu Dhabi every year,” he said.

“There are many two- and three-star hotels that are charging less per room night, which is also diluting the high average room rate that the UAE has always been enjoying,” he added.

To maintain profitability, Rotana is “looking at how [it is] spending money and ways to spend it differently.”

“We are trying hard to relook at our distribution and find different source markets to compensate for certain businesses that are not happening anymore,” he added.

The company does not plan to cut staff, but it has stopped hiring “until further notice”, he said.

Rotana plans to open 19 hotels across the Middle East, Africa and Europe by 2017, bringing the total number of properties in operation to 75.

By Sarah Algethami Staff Reporter