Wednesday, Nov 23, 2016

Dubai: Hotel occupancy numbers, as well as revenues and room rates in the UAE, continued to drop due to a huge supply of new hotels, coupled with a slow influx of holidaymakers from key markets, a new report showed.

The latest data released on Wednesday by research firm STR showed that occupancy rates at hotels in Dubai dropped by 2 per cent to 78 per cent, while the revenue per available room (RevPAR), a key indicator of hotel profitability, was also down 11.6 per cent to Dh596.16. The average daily rate (ADR) fell 9.8 per cent to Dh764.63.

STR analysts partly attributed the performance to a decline in visitors from certain markets. This doesn’t mean that the overall demand has been on a serious downtrend, however. The research firm recorded a year-to-date demand increase of 5.6 per cent, though not strong enough to fill the huge supply of new hotel rooms.

“Strong supply growth [of hotel rooms] has slightly outpaced a year-to-date demand increase in the market,” STR said in a statement.

Across the UAE, hotels reported that occupancy dropped by 2.9 per cent to 75.6 per cent. The average daily room rates (ADR) fell 9.6 per cent to Dh668.05, the lowest for an October since 2005.

As a result, RevPAR declined 12.3 per cent to Dh505.34. “October was the 22nd consecutive month of year-over-year ADR decreases in the UAE, due in part to consistent and significant supply growth (+5.1 per cent year to date),” STR said. At the same time, demand has remained strong, up 5 per cent year to date.

Hoteliers told Gulf News that things are still looking good, with some of them expecting this year’s performance to surpass that of 2015.

“We are facing a higher rate compared to 2015. November and December are primarily busy months with a lot of business to capture in the market. The launch of [several attractions] and airlines dropping their prices are playing a big role for this increase,” a spokesperson for Millennium Plaza Hotel Dubai told Gulf News.

Dubai has recently unveiled key projects, including the 1.5-million-square-foot IMG Worlds of Adventure and the 25-million-square-foot Dubai Parks and Resorts—home to three theme parks and one water park.

“With new developments on the tourism front, where Dubai has seen three new attractions opening in a span of just three months, Dubai is sure to win hearts of tourists and it is going to pull in a huge number probably exceeding earlier years,” said Moussa El Hayek, COO of Al Bustan Centre and Residence.

By Cleofe Maceda Senior Web Reporter

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