Dec. 09–Abu Dhabi, Dubai hotels lead performers in Middle East, Africa.

Dubai’s hotel industry is one of the strongest performers in the Middle East and Africa with higher revenues and profitability despite slight decline in occupancy in October this year, latest reports have revealed.

Abu Dhabi’s hospitality sector also picked up momentum and recorded the highest rise in occupancy levels in the GCC with a 15.8 per cent increase to 76.7 per cent in October, while its 10.7 per cent surge in average daily rates, or ADR, to $172.77 was the largest increase in that metric in the region, according to data compiled by STR Global.

The latest HotStats survey by TRI Hospitality Consulting Middle East also said hotels in the capital registered substantial growth in revenues and profits during October due to the Eid Al Adha holidays and a number of international events like the Abu Dhabi Film Festival and the Fifa under-17 World Cup, among others, hosted by the emirate.

The HotStats survey witnessed growth in top-line performance, which boosted profit levels by 47.3 per cent as gross operating profit per available room reached $117.43 in October. It noted 30.6 per cent growth in revenue per available room, or RevPAR, to $145.13 due to an 8.4 percentage point increase in occupancy levels and a 16.8 per cent rise in average room rates to $182.37 during the month.

The STR Global data also showed that only three markets in the Middle East achieved RevPAR of more than 10 per cent in October. Abu Dhabi hotels recorded the highest rise of 28.2 per cent to $132.46 while Beirut and Muscat recorded a 17.3 per cent ($72.17) and 11.5 per cent ($173.66) increase, respectively.

“The growth in Abu Dhabi’s top-line performance was attributed to the city hosting a number of high-profile international events, including the Abu Dhabi Film Festival and the Fifa U-17 World Cup, which attracted nearly 80,000 visitors during the first two weeks of the competition,” said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.

He said corporate and Mice activities resumed as the capital hosted several international medical conferences. Leisure tourism was propelled in the wake of the Eid Al Adha holiday, as the city provided a variety of family-friendly shopping and entertainment options, he added.

Dubai stays strong

The STR Global report for October said the Middle East and Africa region is posting positive results in US dollar terms despite a 3.5 per cent decrease in occupancy to 63.1 per cent in October. It rated Dubai among one of the strongest performers in the Middle East and said ADR in the region rose 5.9 per cent to $191.44 and RevPAR up 2.1 per cent to $120.88 in October.

“The exception was July, when Dubai saw a decline in occupancy because of the holy month of Ramadan. October was the first month where supply growth outpaced demand growth, and as a result, October was the first month with an occupancy decline,” Elizabeth Winkle, STR Global’s managing director, said in a statement to Khaleej Times.

Goddard said Dubai was able to capitalise on demand through an increase in average rates, which jumped 9.4 per cent in October.

“The holidays helped Dubai attract strong demand from visitors within the region and Saudi Arabia in particular, while Mice activity returned to the market as the city hosted several events including Cityscape Global,” he said.

The HotStats survey said overall performance levels in Dubai increased from the previous year, despite a two-percentage-point decline in occupancy at 83.4 per cent in October. However, occupancy in the month still exceeded the level witnessed year-to-date by 3.5 percentage points. The average room rate increased by 9.4 per cent to an astounding $396.87 driving RevPAR up 6.8 per cent to $330.80 and when coupled with higher operating profits boosted gross operating profit per available room by 7.6 per cent to $280.70, the highest out of the five Middle East and North Africa markets surveyed by HotStats in October.

As Dubai entered its high season, industry circles said hospitality industry will close the year on a high note in the wake of rising tourists and winning the right to host World Expo 2020. The emirate is well on track to beat tourist forecasts for the current year as it already received around eight million visitors during the January-September period.

Last year, Dubai attracted over 10 million, with hotel establishments recording an average occupancy rate of close 80 per cent during 2012. Dubai’s vision for tourism has set out plans to double annual visitor numbers to 20 million in 2020. According to recent CBRE report, hotel supply in the emirate has reached close to 60,000 keys with over 23,000 hotel apartments also operational.

“Over the next three years alone 14,000 new hotel keys and nearly 5,000 hotel apartments could be delivered, adding capacity for a further seven million room nights a year to Dubai’s annual room inventory,” the report said.

–muzaffarrizvi@khaleejtimes.com