Abu Dhabi Sees Sharp Decline in Hotel Rates

Average daily room rates in the capital decreased 14 per cent, reducing revenue intake for each room.

Room rates in Abu Dhabi’s luxury hotels are decreasing due to greater competition according to a report by property consultants JLL.

Abu Dhabi received 277,000 guests in January 2014, a 36 per cent increase from 2013 figures. Occupancy levels also increased seven per cent.

However, despite the rise in hotel occupancy rates in the capital, the decrease in average rates meant a negative revenue per available room growth rate of 8 per cent, said the report.

“Heavy competition has caused hotels to reduce rates to drive occupancy rates across the city,” stated JLL.

The average daily room rates in the capital registered negative growth of 14 per cent, decreasing revenue intake for each room.

The capital is set to receive an additional 3,450 rooms by the end of 2016 and 850 rooms by the end of 2014, bringing the total supply of rooms to 22,300. Most of which will be in the five-star segment.

Tourist numbers are also set to rise with the completion of major upcoming projects such as the Saadiyat and Yas Islands, airport expansions, and the use of international marketing campaigns to attract visitors, according to the report.