Dubai hotels record drops in occupancy, room rates in April

Dubai: Hotels in Dubai continued to post declines in occupancy and average daily rates in April, according to a report from research firm STR Global. The growth in hotel room supply has put pressure on occupancy and room rates in the emirate in the past year.

Occupancy edged down 0.9 per cent year-on-year to 79.7 per cent in April, while average daily rate declined 15.4 per cent to Dh771.74. This pushed down revenue per available room (RevPAR — an industry measure of occupancy and rates) by 16.1 per cent to Dh615.12.

Supply rose 6.1 per cent last month, outpacing demand, which grew 5.2 per cent.

“Although Dubai reported overall performance declines, the Arabian Travel Market (ATM) 2016 helped the market reach occupancy levels above 80.0 per cent for five consecutive days near the end of the month (April 25-29),” STR Global said in a statement.

Elsewhere in the region, Doha hotels posted a drop of 20.4 per cent in RevPAR year-on-year in the first quarter, according to a report from research company HotStats.

Payroll costs increased by 0.2 per cent to $84.79 (Dh311) per available room, or 22.7 per cent of total revenue. As a result of the movement in revenue and costs, profit per room fell by 11.5 per cent for the month in Doha, contributing to the 20.3 per cent year-on-year decline in the first quarter.

Meanwhile, in Jeddah, profit per room declined by 22.3 per cent year-on-year in March, which contributed to the 23.2 per cent decline in gross operating profit per available room (GOPPAR) in the first quarter, as the economy of Saudi Arabia continues to face challenges due to the ongoing decline in oil prices, according to the HotStats report.

The continued decline in revenue and increasing costs has meant profit per room on a 12-month basis has dropped below March 2014 levels and is 14.8 per cent lower than the peak in October 2014, recorded at $178.62.

In Manama, hotels saw a 6.6 per cent drop in total revenue per available room (TrevPAR) in March 2016. As a result, profit per room at hotels in the Bahrain capital fell by 6.9 per cent year-on-year to $77.70 from $83.50 during the same period in 2015.