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Dubai’s hotels record above 85% occupancy

Sector doing well despite strong room supply

Dubai will open 20,000 more hotel rooms by the end of 2016. — KT photo by Rahul Gajjar

Dubai — Hotels in Dubai recorded high occupancy levels of above 85 per cent in January despite continuous strong room supply growth of 6.8 per cent amid an overall positive performance by the hospitality sector across the region.

According to data compiled by STR Global, the Middle East/Africa region reported positive year-over-year performance results in two of the three major metrics in January when reported in US dollars.

The region reported a 1.2 per cent increase in occupancy to 62.8 per cent, a 1.0 per cent rise in revenue per available room to $115.61 and a 0.2-per cent decrease in average daily rate to $184.08.

When looking at the region’s three sub-regions, Northern Africa saw double-digit growth in RevPAR and occupancy, increasing by 24.2 per cent and 14.8 per cent, respectively, according to the data.

Dubai hotels’ occupancy levels, although managed to stay above 85 per cent for January, were three points lower than January 2014, Winkle said. “Demand (+3.7 per cent) continued to grow in Dubai, and with the exception of the months of Ramadan, demand growth for the emirate has been positive in every month for the past five years.

“However, the increasing competition continues to put pressure on rate, and there are downside risks that this will continue throughout 2015,” she added.

Despite the declines in occupancy (-2.5 per cent), ADR (-4.0 per cent) and RevPAR (-6.4 per cent), Dubai still achieved one of the highest RevPAR actuals ($242.85) in the Middle East, STR said in a statement.

STR’s review falls in line with a recent survey report released by EY Middle East showing Dubai’s hospitality market experienced strong room supply growth, with new hotels opening. Consequently, hotels across Dubai recorded a slight drop in RevPAR to $265 in November 2014 on account of the drop in occupancy due to the increased inventory in the city.

Issam Kazim, CEO, Dubai Corporation for Tourism and Commerce Marketing (DTCM), said in January that Dubai would open 20,000 more hotel rooms by the end of 2016 with the focus shifting to mid-market properties. He said Dubai was on track to achieve 150,000 keys by 2020 as part of its plan to become the world’s most popular city destination.

“Many countries in the Southern Africa sub-region saw drops from an occupancy perspective but have managed to hold onto rate in the first month of 2015”, Winkle said.

Three key markets reported double-digit occupancy increases: Cairo (+65.5 per cent to 54.8 per cent); Beirut (+34.9 per cent to 47.1 per cent); and Doha (+11.8 per cent to 83.2 per cent).

Amman, Jordan, reported the largest occupancy decrease, falling 20.8 per cent to 42.5 per cent.

Doha had the highest increase in ADR (+11.4 per cent to $207.25). Beirut followed with a 9.6-per cent increase in ADR to $166.57.

Three key markets reported double-digit RevPAR increases: Cairo (+73.0 per cent to $56.84); Beirut (+47.8 per cent to $78.51); and Doha (+24.5 per cent to $172.34).

— issacjohn@khaleejtimes.com