Dubai Hotel Occupancy Falls As Peak Season Winds Down

Dubai’s hotel occupancy fell by 2.5 per cent in May while average room rates decreased to $243 from $313 in April, latest figures from Ernst and Young’s Middle East Hotel Benchmarking Survey reveal.

Despite a month-on-month decline, Dubai’s overall average occupancy rates rose by five per cent in May over 2012 figures while average room rents increased by 12.1 per cent due to a seasonal spike in the emirate’s beachfront hotels.

Abu Dhabi witnessed a year-on-year increase of average room rates in May from $169 to $194 resulting in revenue per available room (RevPar) growth of 20.9 per cent as compared to same month last year.

Saudi hotels experienced varying levels of occupancy throughout May with Jeddah and Madina recording growth in average room rates while Makkah and Riyadh saw a year-on-year decline.

The hotels in Jeddah and Madina, mainly driven by increase in average room rates, experienced growth in RevPAR of approximately 22.5 per cent and 9.2 per cent respectively in May as compared to same period last year.

However RevPAR in Makkah and Riyadh decreased by 5.4 per cent and 2.4 per cent respectively, resulting in a seven per cent fall in occupancy over last year in Makkah. The occupancy in Riyadh hotels remained largely unchanged since fall in RevPAR was mainly due to a decrease in average room rate.

“May is the start of the summer season in the region, when the hospitality market peak season is coming to an end and the region begins to witness the seasonal slowdown,” said Yousef Wahbah, MENA head of transaction, real estate at Ernst & Young.

“While these seasonal factors, including increased temperatures and the holy month of Ramadan, affect the majority of MENA countries, political and socioeconomic conditions are additionally impacting other countries throughout the region.”

According to an earlier Ernst and Young Benchmarking survey, Dubai’s hospitality market recorded positive growth with an overall year-on-year increase in revenue per available room (RevPAR) of 9.7 per cent for Q1 2013, as compared to Q1 2012.

Across GCC, Manama and Kuwait City too recorded positive growth in hospitality during the first quarter of the year.