Dubai: Hotels in Dubai recorded 87.5 per cent occupancy in January compared to the same period last year, which represented a 0.4 per cent decline, according to STR Global preliminary data.
Elizabeth Winkle, Managing Director of STR Global, said in a statement that the slight drop in occupancy is a result of growing demand not being able to absorb the additional room supply coming into the market.
The trend is expected to continue until the end of the year, according to Yousef Wahbah, Head of Transaction Real Estate for the Middle East and North Africa at Ernst and Young (EY).
“Dubai’s hotel sector is not expected to witness a significant decline in its key performance indicators, however a slight softening of occupancy is expected due to the upcoming supply. Overall, hotels in Dubai are expected to achieve relatively similar occupancy and rates compared to 2013,” he said.
Hotels expected to open in the emirate this year include Sofitel Dubai Downtown, Pullman Dubai Jumeirah Lake and Adagio Dubai Al Barsha, among others.
Rashid Aboobacker, Senior Consultant at TRI Hospitality Consulting, told Gulf News that he expects occupancy to have climbed between two and three per cent in January this year compared to the corresponding time a year ago.
“We don’t think incoming supply is going to have a huge impact this year. We don’t think there is significant supply coming into the market this year,” Aboobacker said, adding that more supply is likely to enter the market next year.
While occupancy was marginally down last month, average daily rate (ADR — a benchmark for performance) was up 11.7 per cent to Dh1,177.74, as per STR Global preliminary data. The rise in ADR is the highest increase for January since 2008, according to Winkle. As a result, revenue per available room (RevPAR) climbed 11.2 per cent to Dh1,031.10.
Occupancy rates in Dubai stood at 80 per cent in 2013, up around 2 per cent compared to 2012, according to Aboobacker. Average room rates were $324.5 in 2013 compared to $306 in 2012, representing an increase of six per cent, he added.
