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UAE hotel occupancy surges as rates drop in 2017: STR

Dubai - Average hotel rates in the UAE dropped while occupancy increase marginally in 2017 as both Dubai and Abu Dhabi continue to add tourist attractions, according to STR study released on Wednesday.
"Supply growth continues to affect hotel performance in the country, especially with Dubai's build-up to the 2020 World Expo and beyond. Not only will the amount of new hotel supply continue to influence Dubai's average daily rates (ADRs), the type of new hotel supply entering the market will create a shift in the pricing landscape, with more offerings in the Midscale segment," it said in a statement.
The UAE market has been historically dominated by the upper-tier hotel classes. Additional offerings in the middle-pricing tiers, however, has helped the market's demand continue to rise, as a wider price range has made Dubai more accessible at various travel budgets, it added.
According to STR, occupancy level in UAE hotels increased 0.5 per cent to 75.1 per cent while ADR fell 3.8 per cent to Dh599.58. Revenues per available room (RevPar) dropped 3.3 per cent to Dh450 last year.
"Dubai continues to add new tourism attractions to stimulate demand growth, helping the market drive hotel demand as inventory expands. Abu Dhabi is following a similar trend, but at a smaller scale due to a smaller market size. 
"An expected increase in oil prices, combined with sustained growth in the non-oil sector, should drive economic expansion in Abu Dhabi in 2018, allowing the economy to rebound from relatively flat performance during the previous 12 months. That should be an encouraging signal that the hospitality industry will turn the corner," STR said.
In the Middle East, all the indices recorded decline in 2017.
Occupancy fell 1.1 per cent to 65 per cent while ADR dropped 4.5 per cent to $164.33. Similarly, RevPar decline 5.6 per cent to $106.89.
-waheedabbas@khaleejtimes.com