Abu Dhabi: Hotels in Abu Dhabi reported a 10.6 per cent drop in average room rates in November to reach Dh660, and a 3.2 per cent decline in occupancy rates in November to reach 81 per cent.
According to the latest figures from STR, a data provider, the decline in room rates resulted in a 13.5 per cent decrease in revenue per available room to Dh534.
While November is traditionally a strong month for Abu Dhabi’s hotels, supply growth (up 3.5 per cent year-to-date) dragged performance down this year compared to November 2015. However, hotels did see four consecutive days with daily room rates above Dh1,000 thanks to the Formula One Abu Dhabi Grand Prix.
November as a whole showed negative year-on-year figures, though. The decline comes as hoteliers in the UAE struggle with lower room rates due to lower demand.
For tourists, especially from Europe and Russia, the strength in the US dollar (to which the UAE dirham is pegged) has turned the UAE into a more expensive destination. Domestic demand is also suffering on the back of lower consumer spending amid a more challenging economic environment,
In its Global Hotel Review report, STR also said Qatar reported a 1.2 per cent decline in occupancy rates to 69 per cent and a 6.8 per cent decrease in average room rates to 470 Qatari riyals.
The decline was due to supply in Qatar outpacing demand, with supply growth at 6.1 per cent and demand growing at 4.8 per cent during November 2016.
STR analysts said that the amount of new supply entering the country is not expected to slow any time soon as there are currently 15,958 rooms in Qatar’s pipeline – nearly 20 per cent of which (3,121 rooms) are set to hit the market in 2017. The country’s economy has also been impacted by falling oil prices, STR analysts noted.
Meanwhile in Muscat, hotels reported a 13 per cent decline in occupancy to 64.2 per cent, and a near-14 per cent decline in average daily rates to 76 Omani riyals. STR analysts said Oman’s economy has been heavily affected by low oil prices.
