Abu Dhabi hotels see profits plummet by a quarter

Abu Dhabi hotels saw their profits plummet by more than a quarter in April, compared to the same month in 2011.

Average room rates fell 11% to US $140.79, while occupancy saw a drop of 3.3% to 69.3%, resulting in RevPAR falling 15% to US $96.60, according to the latest HotStats report from TRI Hospitality Consulting.

However, coupled with an increase of 4.9% in payroll expenses, the gross operating profit per available room saw a 25.4% decrease, to US $79.61.

Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said: “Abu Dhabi hotels are continuing to take a hit in profitability, driven by falling ARR, occupancy and increasing payroll costs. Our HotStats data indicates that the high competition for corporate demand has resulted in a 13.1% fall in average rates generated by the segment.”

He concluded: “With no sign of recovery insight in the coming months, this is likely to lead to further declines in performance levels as we move in the summer months.”