Decent Occupancy Rates in UAE Hotels Despite the Market Challenges

Published June 30th, 2018 - 11:30 GMT
Occupancy in Dubai dropped by 3.4% points from April of last year, but still remained one of the highest in the region. (Pixabay)
Occupancy in Dubai dropped by 3.4% points from April of last year, but still remained one of the highest in the region. (Pixabay)

Hotels across the UAE continue to enjoy healthy occupancy rates, despite challenging market conditions, experts say.

According to the April 2018 MENA Hotel Benchmark Survey Report by EY, the majority of the internationally branded four and five star hotels across the Middle East hospitality market witnessed a decline in revenue per available room (RevPAR) when compared to the month of April last year. In terms of KPIs, the UAE reaffirmed its competitive lead with Abu Dhabi witnessing the highest occupancy rate of 87.9 per cent and Dubai enjoying the highest RevPAR of $235, as well as maintaining the highest average room rate (ADR) of $288.

"Dubai is still one of the most dynamic hotel markets in the world," noted Olivier Harnisch, CEO of Emaar Hospitality Group. "We have the seventh highest RevPAR in the world; so even though rates have been under pressure over the past year, we are still operating at a very high level. We have higher RevPARs compared to cities like Rome and Los Angeles. In terms of tourism, both demand and supply have been growing strongly in Dubai; tourism grew by seven per cent last year, and we have several hotels opening."

He added: "In a dynamic mix such as this, there are periods where RevPARs are under pressure. This is currently the case, but I believe that this is temporary. We have very high occupancies, and tremendous growth rates from some emerging markets such as China, which grew by 60 per cent - it is now the fifth biggest source market for Dubai for tourism. Russia has grown by over a 100 per cent over the last year; and in the first half of 2018, it is the fourth biggest source market. Keeping this in mind, it is clear that there is a change in the business mix, but Dubai is today the fourth most visited city in the world, with the highest ever tourist spend in the world."

He further noted that the city continues to enjoy healthy figures, and that its reputation and attractiveness continues to grow. "In the long term, we are well positioned to be one of the best hotel markets in the world."

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Yousef Wahbah, MENA Real Estate, Hospitality and Construction Sector Leader at EY, noted that high occupancies in both Dubai and Abu Dhabi can be attributed to global and regionally focused high profile conferences and exhibitions. Abu Dhabi's occupancy jumped by 4.7 per cent points from April 2017 to April 2018 due to the inaugural 2018 Culture Summit which attracted government officials, philanthropists, art administrators, business leaders, technologists, and artists from over 80 countries.

In Dubai, occupancy dropped by 3.4 per cent points from April of last year, but still maintained one of the highest occupancy rates in the region thanks to events such as the Dubai Property Festival, and the International Property Show.

"It should be noted, however, that Dubai's RevPAR did decrease by 13.3 per cent from $271 in April 2017 to $235 in April 2018, attributed to an increase in both hotel supply and traveler preferences for more affordable accommodation," said Wahbah.

By Rohma Sadaqat


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