Dubai Hotels’ Occupancy Rates Rise To 83% In January

Dubai’s hotel occupancy rates reached 83.6 per cent in January, fuelled by the emirate’s record air passenger traffic, according to the latest MENA Hotstats survey.

The average room rate (ARR) increased by 10.8 per cent to reach $402.15 in January, in turn boosting revenue per available room (RevPar) by 9.5 per cent to $347.17.

The survey attributed the higher than average rates during the start of the year to the holiday season.

The growth in top line revenues, coupled with a decline in operating expenses, drove an increase in profits during the month as gross operating profit per available room (GOPPAR) reached $302.94, up by 10.4 per cent over the same period in 2013.

“Hotels in Dubai successfully yielded higher average rates on the back of strong leisure demand during the month of January,” said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.

“The growth in hotel performance also came in the wake of a number of key occasions including the Orthodox Christmas and New Year, which attract substantial demand from Russia and the CIS market.

“In addition, the annual Dubai Shopping Festival occurred throughout the entire month of January and based upon initial estimates saw a 5.0 to 10.0 per cent rise in shoppers, with the GCC and East Asia maintaining their position as the top source markets,” said Goddard.

As the emirate readies itself to achieve its aim of attracting 20 million visitors per year by 2020, the authorities have introduced a number of measures to boost the hospitality sector.

Dubai recently introduced a series of directives aimed at enhancing and streamlining hotel investments and developments in the emirate. Expediting the hotel construction pre-approval process and easing of fees in the hospitality sector are some of the incentives that were introduced as per the new directive.

Abu Dhabi hotels too recorded strong growth with ARR rising 7.6 per cent to reach $165 in January while occupancy rates rose to 74.7 per cent. The capital’s high room rates were driven by events such as the Abu Dhabi Golf Championship and the Abu Dhabi Sustainability Week.

The growth in the top line, combined with a 2.6 per cent drop in payroll costs, resulted in a 35.9 per cent surge in profit margins during the month as GOPPAR reached $86.88.

Within the GCC, hotels in Doha reported around 10 per cent growth in occupancy this January while RevPAR grew 16.9 per cent. However, ARR dropped 1.2 per cent, according to the survey.

Hotels in Riyadh and Kuwait saw a decline in performance during the month of January due to low demand.