Dubai tops in region's hotel occupancy, revPAR

Dubai has come out on top in terms of hotel occupancy and revPAR (revenue per available room) in the Middle East, as per figures from the first quarter of this year, analysed by Deloitte, the business advisory firm.

The fall in hotel performance has been considerably arrested in Dubai, with a year-to-March dip of only 0.8 per cent.

The emirate also celebrated its second consecutive month of revPAR growth in March, after 15 consecutive months of decline. However, with 8,560 rooms due to open in 2010 and 7,623 rooms to open in 2011, according to Lodging Econometrics (LE), Dubai may experience further adjustments in hotel performance.

The analysis has found that revPAR, a key performance indicator for the hotel industry, was down 10.4 per cent in the Middle East during the first quarter of 2010, compared with the same period last year.

However, the declines in revPAR have slowed to single digits over the past few months, down 8.3 per cent in February and 4.1 per cent in March. Commenting on the results from STR Global, Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality and Leisure, at Deloitte, said: "Demand for hotel rooms has been showing a strong increase since October 2009, and is up 9.8 per cent during the first quarter of 2010. This reflects a 24.5 per cent jump in air traffic, across the region year-to-February as reported by the International Air Transport Association. However, the surplus of new room supply is putting continued downward pressure on hotel performance."

In Abu Dhabi, revPAR is down 50.3 per cent, the steepest decline across the Middle East. At this point last year, hotel performance in the emirate was still growing and had not encountered the decreases that other cities were experiencing.

With 2,201 new rooms set to open in Abu Dhabi in 2010 and an additional 8,760 to open in 2011, according to LE, "we expect hotel performance to continue to contract against performance last year", Kyriakidis said.

Rob O'Hanlon, Middle East Partner of Tourism, Hospitality and Leisure, at Deloitte, said: "Hoteliers in the Middle East achieve the highest revPAR levels globally, and the hospitality industry is focusing on innovative strategies to attract new feeder markets to the region, to keep hotel performance healthy. For instance, Dubai has reintroduced its 'Kids go Free' campaign this summer, offering two children under the age of 16 complimentary flights, hotel stays, tourist visas, accommodation and several other benefits when accompanied by two adults."

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