Dubai: Hotels in Dubai recorded the highest occupancy rates in 2017 compared to other markets in the Middle East and North Africa (Mena) at 77.7 per cent, with hotels in Abu Dhabi following closely at 77.1 per cent.

According to the latest report from advisory EY, Dubai’s hospitality market also registered the highest revenue per available room of $189 in 2017, followed by Jeddah where revenue per room reached $170 (Dh624).

Despite the strong revenue per available room in Dubai, this was lower on a year-on-year basis, with Dubai seeing a drop of 6.2 per cent compared to 2016 as hotels in Abu Dhabi saw a 2.6 per cent decline year-on-year in revenue per available room.

Average room rates in Dubai also fell by 4.4 per cent to reach $243 in 2017, as occupancy rates fell 1.4 percentage points. EY attributed the decline in performance indicators to the additional supply of hotel rooms in Dubai.

Meanwhile in Abu Dhabi, occupancy rates saw an increase of 2.2 percentage points over 2016, as average room rates fell 5.3 per cent year-on-year to $120.

The highest room rates of the year were recorded in Saudi Arabia, with an average daily rate of $300 in Makkah, as rates in Jeddah averaged $266.

Government initiatives

Yousef Wahbah, Mena real estate, hospitality, and construction sector leader at EY, said the announcement of several mega projects and government initiatives in the region will help drive tourism in 2018.

“In the UAE, the growth in hospitality supply will be sustained by an increase in occupancy through demand from existing markets and new source markets,” he said.

Wahbah pointed that initiatives such as the expansion of visa on arrival to Russian, Chinese, and certain Indian citizens will help increase visitor numbers, and support the UAE’s hospitality market.

He added that in Saudi Arabia, government initiatives have also paved the way for increased leisure tourism.

Elsewhere in the Middle East, Cairo’s hospitality market saw growth across all key performance indicators in 2017 due to continued political stability in Egypt. EY said the country’s hotels will benefit from the opening of two airports and continued government efforts to improve bilateral relations.