RevPAR has fallen dramatically in Beijing despite increased publicity generated from the 2008 Olympics Games. RevPAR has fallen dramatically in Beijing despite increased publicity generated from the 2008 Olympics Games.

And so to the UAE, and what a contrast Abu Dhabi and Dubai provide; the capital has achieved a revPAR of $252.50 in 2009, a massive $67 more than any other city in the region and a 7% increase on 2008. Meanwhile Dubai has suffered both the greatest percentage (-36%) and absolute (-$98.90) revPAR fall regionally.

We know that Dubai has suffered, like Cairo, from a drop in leisure demand and that this has been coupled with a number of high-profile new openings in the city that have increased room supply by an estimated 17% year on year; two factors that have not significantly impacted Abu Dhabi.

Furthermore, Abu Dhabi appears undersupplied with rental accommodation, and this factor assists the city’s hotels in driving up yield. Nonetheless, this difference is quite startling.

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The global picture
So how does Dubai and the region’s performance rate globally? A year ago Beijing was in the midst of the Olympics Games. You would expect that the games’ legacy would result in a raised profile that would drive leisure visitation, much in the way that Barcelona benefitted post 1992.

Unfortunately the economic crisis, coupled with the new hotel supply growth associated with the games, has led to a revPAR fall of more than 44% to $43.28; a particularly low figure for a city of Beijing’s status.

In Madrid, a decrease in revPAR by more than 41% to $73.74 reflects the Spanish economy, which is deep in recession and similar to Dubai, Spain has also experienced a severe correction in real estate values.

New York has suffered a 32.5% drop in revPAR; down to $144.18. As a global financial centre the city is particularly vulnerable to the repercussions of the banking crisis and ironically, a stronger dollar recently has discouraged international visitors.

Both Madrid and New York must be considered mature hotel markets and as such might be expected to show less volatility than a relatively new city like Dubai.

They have, however, suffered to a similar or greater extent and it appears that overall the Middle East has suffered no greater pain as a result of the global recession than any other region of the world.