Average Abu Dhabi hotel rates slump 10% in 2016

Arabian Business staff writer, October 25th, 2016

Abu Dhabi’s hotel performance remained under pressure over the first eight months of 2016, with double-digit room rate declines, according to a new report.

JLL's Q3 Abu Dhabi Real Estate Market Overview showed that average daily rates (ADR) fell by 10% during January and August, compared with the same period last year.

City wide ADRs stood at US$121 in the same period while overall occupancy rates were calculated at 70%, down 2.3% on the same time last year.

JLL said that as a result, revenue per available room (RevPAR) lost 12 percent to reach $85 over the first eight months of the year.

JLL MENA international director and head of Abu Dhabi Office David Dudley said: “The general trend for Abu Dhabi’s hospitality market has been positive growth of tourism demand being offset by a decline in corporate demand and new supply completions. In balance this has resulted in a slight increase in demand reducing pressure on occupancy rates but a decline in average room rates.”

The report highlighted increased supply with two new hotel openings adding more than 400 rooms to the market this quarter – the Marriott Downtown Abu Dhabi at Bloom Central and Gloria Downtown Hotel.

The serviced apartments sector also witnessed the delivery of the Marriott Executive Apartments at Bloom Central. A further 1,500 rooms are expected in the capital by the end of the year from three large hotel openings - Grand Hyatt Hotel and Residence Emirates Pearl, Millennium Bab Al Qasr and the Marriott Al Forsan.

JLL said hotel occupancies in Abu Dhabi have remained largely stable at 70% this quarter, adding that the hospitality industry’s diversification towards leisure tourism continues to gain traction and has reduced pressure on occupancy rates.

Dudley stated: “The medium term hospitality market outlook remains highly positive due to wide-ranging government initiatives including the expansion of Abu Dhabi International Airport and Etihad Airways, further improvement of Abu Dhabi’s leisure offering, the hosting of world-class events and major campaigns by Abu Dhabi Tourism & Culture Authority to promote Abu Dhabi internationally.”