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Dubai hotels record fastest average daily rate growth

Sector posts region’s highest revenue per available room

Dubai hotels posted significant growth in revenues during the first three quarters with total revenues surging by 17.1 per cent to Dh15.33 billion. — KT file photo

Hotels in Dubai recorded the biggest increase in average daily rate, or ADR, in the Middle East/Africa region in November to underscore the emirate’s position as the fastest growing hospitality hub of the region.

Dubai’s ADR growth of 9.9 per cent to $290.68 far outpaced the regional average growth rate. Dubai, which was recently elected to host the prestigious World Expo 2020, also boasts the region’s highest revenue per available room (RevPAR) at $254.18. The Mena region reported mixed performance results during November 2013, according to data compiled by STR Global.

The region reported a 1.7 per cent decrease in occupancy to 64.6 per cent, a 6.8-per cent increase in average daily rate to $180.88 and a 4.9 per cent increase in RevPAR to $116.78.

“In the Middle East and Africa region, demand is outpacing supply on a rolling 12-month basis, achieving 3.7 per cent and 2.7 per cent growth, respectively. RevPAR has been driven by rate, with a 3.4 per cent growth in US dollar terms. The region’s performance is mostly driven by Middle Eastern markets of Abu Dhabi, Dubai, Manama and Muscat, which all posted double-digit RevPAR growth year-to-date November 2013 in local currency terms,” said Elizabeth Winkle, STR Global’s managing director.

Qatar recorded the largest ADR drop at 18 per cent to $181.23 as five markets achieved RevPAR increases of more than 10 per cent. These include Amman (+19.3 per cent to $105.97); Beirut (+19.2 per cent to $64.36); Manama, Bahrain (+15.2 per cent to $100.67); Dubai (+12.7 per cent to $254.18); and Abu Dhabi (+10.4 per cent to $171.7).

Cairo fell 43.3 per cent in RevPAR to $33.74, posting the largest decrease in that metric. Beirut reported the largest occupancy increase, rising 22.3 per cent to 43.2 per cent. Amman followed with a 14.2 per cent increase to 67.8 per cent. Cairo fell 39.3 per cent in occupancy to 33 per cent, posting the largest decrease in that metric.

The UAE, which is already among the top five countries in the world for new hotel openings over the past five years, saw positive growth throughout the first 11 months of 2013. The country has the longest pipeline of rooms under construction with an additional 32,107 rooms in the offing while the Middle East/Africa hotel development pipeline comprises 483 hotels totaling 117,450 rooms.

Dubai hotels posted significant growth in revenues during the first three quarters with total revenues surging by 17.1 per cent to Dh15.33 billion. Total guest nights also recorded similarly impressive rises, up 13.7 per cent to 30,874,916 from 27,163,974 in the first nine months of 2012.

EC Harris, the global consultancy, estimates that there were 23,500 five star rooms in Dubai in 2012. However, this number has grown significantly throughout the last 18 months as operators launch new properties to meet growing demand and cash in on lucrative room rates. The Construction Pipeline Report released by STR Global predicts that Dubai’s hotel room capacity will grow 28.6 per cent in 2013 with 17,409 rooms in the pipeline. Dubai has also been named a top 10 global destination for business, leisure and shopping tourists in a research exercise by Genesis Consulting ME.

— issacjohn@khaleejtimes.com