Gulf hospitality sector still struggling to find its footing
Supply outstrips demand but experts say recovery to set in late next year
Dubai: The hospitality industry in the Gulf region is still reeling under the impact of the downturn and has suffered declines in all the four key measurements in year-over-year results for September, top industry experts said.
"The region has improved, especially [the] UAE, considerably when compared to August, while average revenue per available room [RevPAR] growth is finally showing signs of improvement," James Chappell, managing director of STR Global, said.
The region's occupancy rates dropped 13.05 per cent to 51.48 per cent; average daily rates fell 10.45 per cent to $197.51 (Dh725.4); revenue per available room decreased 22.13 per cent to $101.67 and revenues fell by 15.49 per cent to $396.83 million.
"We currently expect 2009 to end with RevPAR declines in most markets compared to 2008 resulting from declines in both occupancy and average room rates as demand has declined across the region," Konstanze Auernheimer, STR Global marketing director, said in an interview with Gulf News.
He said if the wider economy continued on its current path, improvement would set in during the latter half of 2010.
Worst fall
Saudi Arabia and Qatar suffered the worst fall among the Gulf countries. Saudi Arabia's occupancy rates fell 26.47 per cent to 47.67 per cent in September 2009 when compared to 64.83 per cent during the same period last year.
In Qatar, occupancy rates fell more than 30 per cent to 37.22 per cent when compared to 53.58 per cent in September 2008.
Konstanze said the September results were down in Saudi Arabia partly due to the change of Ramadan compared to last year. Qatar's performance is in line with the past few months.
The UAE showed the least decline among Gulf countries. Occupancy rates fell by 4.23 per cent to 58.08 per cent when compared to 60.64 per cent in September 2008.
"The recent years of investment and development of hotels and tourism infrastructure have led to a strong increase in supply which now suffers due to missing demand. Whilst the revPAR declines look huge, the UAE still achieves the highest revPAR (year-to date) for the region," Konstanze said.
Robert O'Hanlon, tourism, hospitality and leisure partner at Deloitte Middle East, said Dubai's occupancy decreased by 10.6 per cent in September 2009 compared to August 2009.
The average growth of occupancy in the quarter July-September 2009 is 1.86 percentage points higher than in the same period in 2008. RevPAR showed a small increase in September 2009 relative to August 2009.
The average growth of RevPAR in the quarter July-September 2009 was 4.06 percentage points higher than in the same period in 2008. Abu Dhabi's RevPAR rose by 13 per cent in September.
