Abu Dhabi saw hotel revenues rise one percent in the first quarter of 2012 after occupancy rates fell six percent as more supply came to market.
Revenues topped AED1.2bn ($362m) while average room rates hit AED500, the emirate's tourism authority said in a statement.
Occupancy rates dipped over the comparative period which the authority said was "a simple result of supply and demand dynamics".
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"We have more accommodation product in the market - which has increased choice and competitiveness to the traveller - an advantage we are now determined to leverage," said Abu Dhabi Tourism & Culture Authority director general Mubarak Al Muhairi.
Figures released showed that 594,918 guests stayed in the emirate's 130 hotels and hotel apartments from January to March end this year - a 17 percent increase on Q1 of 2011.
Guest nights over the same three-month period rose 10 percent year-on-year to stand at 1.725 million.
Guest arrivals growth was recorded across all key regional markets with the exception of North America.
Domestic tourism held up well producing 212,597 guests and 401,347 guest nights - rises of 11 percent and 8 percent on the comparative period last year.
Strong growth also came from the GCC - which delivered 57 percent more hotel guests than in Q1 last year.
"The GCC is increasingly productive for us and we can look forward to further growth from this sector as Etihad, our national airline recently increased its frequency from Kuwait to Abu Dhabi by four flights a week and added an additional three weekly flights from Damman in Saudi Arabia to the UAE capital," said Al Muhairi.
The UK remained Abu Dhabi's top performing hotel guest source market, although numbers slipped two percent in the first quarter.
From January to March end some 37,095 British stayed in the emirate's hotels, translating into 159,216 guest nights. India ranked second, accounting for 31,564 hotel guests and delivering 112,681 guest nights - a 15 percent increase on Q1 last year.
Hotel guest growth from Asia was up 37 percent, driven largely by increased traction from China, the figures also showed.
"Having just completed a five city road show around the People's Republic we are confident of building momentum from the country," added Al Muhairi.
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