Dubai hotel revenue slumps in June

New data shows a surge in new rooms and decline in occupancy has forced down revenue per available room by 4.5%

Dubai hotels saw their average revenue per available room significantly fall last month, according to data from industry analysts STR Global.

RevPAR dropped 4.2 percent to AED493.68 ($134), partly because new supply outstripped an increase in demand by four times.

There was an 8.6 percent growth in the supply of hotel rooms in the emirate during June, far outweighing the 2.6 percent increase in demand, the data shows.

There also was a 5.5 percent decline in occupancy, pushing it down to 75 percent. Dubai has been averaging more than 80 percent occupancy.

However, hotels continued to increase room rates, with the average rate across the emirate up 1.4 percent to AED658.12.

“Occupancy declined in June for the second month in a row, as demand growth slowed during one of the hottest months in the year and supply growth remained strong,” STR Global managing director Elizabeth Winkle said.

“[The average daily rate] continued to grow, posting the highest levels of any June since 2008. However, such an increase was not able to fully offset the negative occupancy performance.”

Across the Middle East and Africa, STR Global said there were 614 hotels under contract, totalling 143,870 rooms.

The data includes projects under construction and in planning stages but does not include projects in the unconfirmed stage.

The UAE (17,137 rooms) and Saudi Arabia (15,415 rooms) reported the most rooms under construction in the region.

Six other countries also have more than 2000 rooms under construction: Qatar (5,985 rooms); Jordan (3,241 rooms); Morocco (2,466 rooms); Egypt (2,379 rooms); Algeria (2,166 rooms); and Iraq (2,082 rooms).

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