Affordable room rates boost Dubai’s hotel occupancy during Ramadan

Dubai’s hospitality sector witnessed decent occupancy rate in May while recording an increase in occupancy in the first two weeks of Ramadan amid falling room rates.

Dubai recorded a 2.9 per cent increase in occupancy over the two-week period, but average daily rate (ADR) was down 9 per cent, resulting in a 6.4 per cent decrease in revenue per available room (RevPar), said STR Global, which provides data and analytics about the global hospitality industry.

Summer months are traditionally slower period for the region’s hospitality sector, registering a decline in tourist inflows.

Releasing its May figures for the regional hospitality markets, Ernst & Young said Dubai hotels recorded an average occupancy of 86 per cent, followed by 81 per cent in Abu Dhabi and 74.2 per cent in Ras Al Khaimah (RAK).

While occupancy rates remained high in both Dubai and Abu Dhabi, their hospitality markets witnessed a decrease in RevPAR of 7 and 8.9 per cent, respectively, in May 2016. This was mainly due to the drop in average daily rates in both cities. Conversely, RAK and Jeddah recorded positive increases in RevPAR, when compared to the same period last year.

Dubai’s hospitality market witnessed a drop in RevPAR from $200 in May 2015 to $186 in May 2016. Average daily rate fell 8.2 per cent to $274 from $299.

Abu Dhabi’s hospitality market witnessed a drop in RevPAR by 8.9 per cent in May 2016 when compared to the same period last year, this was mainly due to the drop in ADR from $127 in May 2015 to $115 in May 2016.

“STR analysts note that even with consistent supply growth, Dubai’s ADR remains among the highest for major global markets,” it added.

There are approximately 93 hotels with 27,344 rooms under contract in the UAE, second highest after Saudi Arabia.

Makkah records increase in RevPAR

An STR analysis of the first half of Ramadan 2016 indicated that Makkah, Saudi Arabia, was the only major hotel market in the Middle East to experience an increase in RevPAR during the first two weeks.

Makkah’s hotels experienced a 1.3 per cent increase in occupancy and an 8.5 per cent increase in average daily rate, leading to a RevPAR increase of 9.9 per cent.

Muscat experienced the steepest RevPAR decline during the two-week period, falling 23.4 per cent. The decrease was caused equally by an 11.4 per cent decrease in occupancy and a 13.8 per cent drop in ADR.

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