Abu Dhabi hotel room rates fall amid competition

TRI Hospitality report says UAE capital facing subdued rates despite occupancy rise
By Andy Sambidge
Sat 05 Jan 2013 10:55 AM

Increasing competition in Abu Dhabi's hotels sector continued to drag down room rates in November, according to latest analysis by TRI Hospitality Consulting.

Its new report said average room rates in the UAE capital fell seven percent in November, dragging down revenue per available room (RevPAR) by 6.8 percent.

The declines came despite a small rise in occupancy levels, up 0.2 percent to 83.5 percent - among the highest in the Middle East region.

Occupancy was boosted in the early part of November by Abu Dhabi's hosting of its annual Formula 1 race, the TRI report said.

It added that a "significant decrease" in food and beverage revenues coupled with a decline in conference and banqueting revenues saw total revenue per available room (TRevPAR) drop 5.9 percent with gross operating profit per available room (GOPPAR) falling 8.2 percent.

Peter Goddard, managing director of TRI Hospitality Consulting, said: "Hotels in Abu Dhabi maintained occupancy levels of 2011, however bottom line performance continues to suffer due to the perpetual pressure on rates as a result of new competition.

"The capital city boasted the second highest occupancy rates in the region during November. Conversely, RevPAR remained subdued as hotels continue to lower their rates despite a steady growth in demand."

Last month, it was announced that Abu Dhabi hotel revenues rose six percent to $1.2bn in the first 11 months of 2012 compared to the same period in 2011.

Figures released by Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi) showed that food and beverage incomes accounted for $439m of the total - 12 percent up.

The number of hotel guests staying in Abu Dhabi's 137 hotels, resorts and hotel apartments from January to November rose 14 percent with guest nights up 11 percent, the figures also showed.

Some 2,171,680 hotel guests stayed in the emirate's accommodation in the first 11 months of the year - beating last year's overall performance.

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