More than 1,200 new rooms are set to enter the Abu Dhabi hotels market by the end of 2010, putting further pressure on occupancy and room rates, a new report by Jones Lang Lasalle has revealed.

Occupancy, revenue per available room (revPAR) and average daily rates (ADR) have seen double digit declines every month this year, according to data from STR Global.

And the three key measurements of hotel performance are set to remain depressed due to the increased supply, Jones Lang Lasalle predicted.

It added that nearly 7,500 hotel rooms were expected to enter the market by the end of 2012, increasing the current suply by almost 75 percent.

Story continues below
Advertisement

The consultancy said that while occupancy in established business locations in Abu Dhabi had remained high, the newer Yas Island properties "are experiencing lower occupancy rates".

Average occupancy rates for quality hotels in Abu Dhabi had fallen from 80 percent in the first five months of 2009 to 58 percent in the same period this year.

Eighty percent of hospitality demand in the UAE capital was business related, JLL said, while the leisure sector was still "under-represented".

Analysts added that average daily rates across the city had declined by about 35 percent to AED830 over the past year as a direct result of the number of new openings.

"While demand growth has accelerated in Abu Dhabi, recent supply additions have outpaced demand growth," according to the JLL report.

Last week, tourism chiefs in Abu Dhabi said the number of visitors to the UAE capital had increased 16 percent in the first half of the year.

Abu Dhabi Tourism Authority (ADTA) said 936,579 guests stayed in the UAE capital’s 116 hotels and hotel apartments between January and June, with guest nights rising 11 percent on the first half of 2009 to stand at 2.47 million.

However, it added that the capital’s increased accommodation stock has meant that over the past six months, occupancy levels have fallen by 18 percent to around 64 percent, and revenue dropped by five percent to about $570m.

Jones Lang Lasalle's new report said that new attractions such as the Ferrari World theme park, due to open in October, and the Saadiyat Island museums, which are scheduled to open in 2012, would "significantly enhance" the city's leisure offering for tourists.