Dubai's RevPAR registered 9% YOY decline until Q2

A JLL report revealed that Dubai's hotel sector continued to face downward pressure in the second quarter of the year amid a slowdown in visitors from Russia and the Eurozone.

The report said average daily rates (ADR) saw a 6% decrease to US $249 in the year to May. Coupled with a marginal decline in occupancy rates, revenue per available room (RevPAR) registered $208, a 9% decline year-on-year.

JLL said it anticipates ADR may soften further in the short-to-medium term, in response to the additional 30,900 keys scheduled for delivery over the next couple of years and a slowdown in visitors from Russia and the Eurozone.

Chiheb Ben Mahmoud, head of the hotels & hospitality group at JLL MEA, added: "The Dubai hotel sector maintains its position as the strongest in the region, amid continued softening of the activity indicators.

"Q2 continued to reflect the impact of the drop in the number of tourists from Russia and the Eurozone. ADR adjustments allowed the impact on the city occupancy rate to be relatively limited remaining in the range of the ten-year historical average.

"Translating the push for competitiveness, the ADR for Q2 2015 stands at 7.2% lower than the ten-year historical average, highlighting the need for hotel owners and operators to focus on operational efficiencies."

The decline in Russian tourists visiting Dubai has also led to a slowdown in luxury retail sales in the emirate during the second quarter of 2015. While the market remained largely stable during Q2, there was a slowdown in annual rental growth levels and retail sales, largely driven by a decline in the number of tourists from Russia.

His Excellency Helal Saeed Almarri, Director-General of Dubai Department of Tourism and Commerce Marketing (DTCM) has also said that the number of Russian visitors to Dubai will level out by the third quarter of this year.