Dubai: Dubai hotels continue to see high occupancy levels as the hotel market saw an 86 per cent occupancy in the first half of the year, according to a report by HotStats.
“Dubai’s hotel market continues to grow from strength to strength … the high levels of demand continue to be driven by the strong economic activity within the city, coupled with its attractiveness as an all-round leisure destination,” said Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai.
Dubai’s hotel market led regional markets in its June performance, as occupancy climbed 3.6 per cent to 79.2 per cent, according to the report.
Average Room Rates (ARR- a benchmark for performance) were up 6.2 per cent to $207.49 (Dh761.48), increasing Revenue Per Available Room (RevPAR) by 11.2 per cent to $164.22, as per the report.
Also, a boost in food and beverage revenues increased Total Revenue Per Available Room (TrevPAR) by 7.3 per cent, which helped profitability to go up 12.2 per cent to $90.37.
The month before saw occupancy rise in Dubai hotels, too. Hotels achieved a five per cent increase in occupancy to 83.2 per cent in May, compared to the same time a year ago, while ARR was up 12.1 per cent, and RevPAR rose 19.4 per cent, according to a report by Ernst and Young, a global consulting firm.
“These increases can be attributed to a substantial seasonal spike of 8 per cent in the city’s beachfront hotels. Despite Dubai’s overall performance slowing marginally in May 2013 as compared to April, the numbers are in line with the city’s typical summer season…,” said Yousuf Wahbah, Head of Transaction Real Estate in Mena at Ernst and Young.
Events
Strong attendance at Dubai’s festivals and annual events has boosted occupancy levels during certain times of the year, according to Goddard.
Meanwhile, Abu Dhabi hotels have performed well in the last six months, with demand up 13.4 per cent.
Occupancy in Abu Dhabi hotels stood at 75 per cent year-to-date. It increased by 9.7 per cent in June, while RevPAR rose 8.3 per cent, and Gross Operating Profit per Available Room (GOPPAR) was up 2.9 per cent to $29.57, as per the HotStats report.
However, ARR dropped 7.7 per cent to $115.12, it said.
“Abu Dhabi is continuing to see an increase in visitor demand…the growth in demand is attributed to a 25 per cent increase in visitors to the capital and a 12.6 per cent rise in passengers through Abu Dhabi International Airport during the first half of the year,” Goddard said.
He added that in spite of a strengthening hotel market, “hoteliers continue to face considerable challenges in reversing declining average rates in the response to a substantial increase in supply”.
Abu Dhabi hotels saw occupancy reach 80 per cent in May, according to Ernst and Young’s report.
Meanwhile, other areas of the Middle East and Africa (Mena) region saw growth across all indicators during the first half of the year.
Stable performance
Hotels in Jeddah, Saudi Arabia registered 85.4 per cent occupancy in June, while ARR grew by 16.1 per cent to $263.11 — the second highest in the region, highlighted the HotStats report.
In the Eastern part of the Kingdom, Riyadh recorded a 1.3 per cent increase in occupancy to 68.4 per cent in the last six months, maintaining a stable performance. However, average rates dropped 2.1 per cent to $242.75, which helped reduce RevPAR by 0.3 per cent to $165.96.
Kuwait’s hotel market grew in the first half of the year. Occupancy was up 4.7 per cent, while ARR rose 1.7 per cent, increasing RevPAR by 10.3 per cent to $159.98.
In Sharm Al Shaikh, meanwhile, occupancy rates were up 4.4 per cent to 59.8 per cent in the last six months, and RevPAR increased by 26.7 per cent, showed the HotStats report.
In addition, Cairo hotels saw occupancy rates fall 2.3 per cent to 44.7 per cent year-to-date, but RevPAR grew by 7 per cent, and ARR was up 12.4 per cent to $111.97.
