Funny Figures
However, these positive figures released by TCA Abu Dhabi seem to contradict the recent Abu Dhabi HotStats market performance figures released by TRI Hospitality Consulting, which reveal a continual decline in ARR in the city, with a fall of 8.3% to AED 460 ($125) in May.
This is a trend that according to TRI Hospitality Consulting senior consultant Christopher Hewett can be clearly attributed to the “sheer number of hotels coming online in the Abu Dhabi market.”
“One of the main factors is the highly competitive corporate market that is present in Abu Dhabi at the moment. The corporate market is still the main driver for the Abu Dhabi market and the amount of supply on offer is giving corporate customers the ability to bid hotels against each other in order to drive rates down,” adds Hewett.
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This cautious view is shared by STR Global’s area director for Middle East and Africa Philip Wooller, who believes that Abu Dhabi has suffered from the optimism and excitement generated prior to the recent economic downturn.
“The vision for Abu Dhabi, especially before the crash of a few years ago, was incredibly exciting. This in turn caused a lot of international operators to begin clambering over themselves to open a property there. Unfortunately, things stalled slightly during the downturn but these projects stayed in development and what we are seeing now is the fruition of that,” says Wooller.
“In the period between 2010 and 2011 I believe, supply in Abu Dhabi went up something like 50%, while in the luxury sector in 2012 supply went up around 68%. This in turn caused 2012 occupancy levels to fall across the board. However, those difficult times are appearing to be behind us, with demand in 2013 so far going up 20% in contrast to supply which has so far gone up only 12%,” adds Wooller.
This optimism for the year ahead is also shared by Hewett at TRI who states that “the good news is that visitor numbers are increasing and that things are looking good when it comes to demand. Over the last 12 months Abu Dhabi has successfully widened the leisure opportunities of the city and that appears to be paying dividends.”
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