Dubai hotel occupancy stays strong, revenues fall

Arabian Business staff writer, March 10th, 2017

Dubai hotels saw average occupancy rates of more than 85% in January, the highest in the Middle East and North Africa, but room rates and revenues continued to slip, according to new figures.

EY's January 2017 MENA Hotel Benchmark Survey report said the emirate also posted the highest revenue per available room (RevPAR) at $246, over three times the average RevPAR recorded in other MENA cities.
But while beach hotels were the top RevPAR performers, Dubai’s hospitality market saw average room rates and RevPAR drop 8.1% and 7.3% respectively compared to a year earlier, which could be a result of an oversupply of rooms, the report said.

Dubai beach hotels had the highest RevPAR of $343, while city-based hotels in Dubai recorded the highest occupancy at 87.6 %, it added.

Elsewhere, Abu Dhabi’s hospitality market maintained a strong occupancy of 77% in January but witnessed a decrease in RevPAR and ADR of 11.8% and 10.6% when compared to the same month last year.

In Saudi Arabia, the EY report said Riyadh and Jeddah’s hospitality markets witnessed a drop in RevPAR by 22.6% and 27.5 % respectively, driven by a decreased number of conferences and exhibitions due to corporate spending cuts in both the public and private sectors.

EY said the MENA hospitality market is expected to continue the trend of a softer performance as compared to the previous years on account of the overall macro-economic environment.

Yousef Wahbah, MENA head of transaction real estate at EY said: “Overall, the majority of the hospitality market across the Middle East witnessed a decrease in key performance indicators in January when compared to the same month last year. In the GCC, all markets except Kuwait recorded lower revenue per average room (RevPAR), reflecting the slowdown in performance witnessed across the wider MENA region."