Dubai: Average room rates and occupancy of Middle East and Africa hotels were down in October, according to a report published by research firm STR Global on Wednesday.
Average daily rates (ADR) dropped 12.3 per cent year-on-year in October to $200.66 and occupancy declined 4.6 per cent to 67.4 per cent, pushing down revenue per available room (RevPAR — an industry measure of rates and occupancy) 16.3 per cent to $135.24.
In the UAE, occupancy edged down 0.7 per cent to 78.5 per cent, largely due to growing room supply. Supply growth outpaced demand last month, growing 5.1 per cent and 4.4 per cent, respectively. ADR fell 10.3 per cent to Dh753.30 due to the weak euro, and RevPAR, as a result, slipped 10.9 per cent to Dh591.31.
“With a decrease in international arrivals from Europe, hotels have lowered rate in an effort to sustain demand,” STR Global said in a statement. In Dubai, occupancy dipped 2.5 per cent to 80 per cent and ADR fell 11 per cent to Dh871.96, leading RevPAR to drop 13.2 per cent to Dh697.20.
“The shift of Eid al-Adha from October 2014 to September 2015 negatively affected performance, especially at the beginning of the month. ADR in the market has continued to decline in year-over-year comparisons as the market prices more competitively to try to stimulate the traditional levels of high demand,” STR Global said in the statement.
Meanwhile in Qatar, occupancy declined 6.2 per cent to 74.1 per cent, while ADR remained flat at 695.85 Qatari riyals. As a result, RevPAR decreased 6.2 per cent to 515.91 Qatari riyals.
Room supply in the Gulf nation increased 5.5 per cent last month — the highest supply growth since March 2013. Supply growth has been above 3 per cent each month since August, while occupancy has been declining by at least 5 per cent for the same period.
Similarly, hotels in Egypt saw occupancy and ADR slip 2.9 per cent in October to 59.2 per cent and 625.72 Egyptian pounds respectively. This resulted in a 5.7 per cent decrease in RevPAR to 370.48 Egyptian pounds.
However, RevPAR year-to-October was up 31.2 per cent, as per the report. This is due to the recovery of the hotel industry; however the crash of the Russian plane in Sinai last month is expected to weaken the industry’s performance in November, STR Global stated.