Dubai hotels prove resilient in 2011 despite supply glut

Dubai hotels have been able to maintain revenues during 2011 despite a large increase in the number of rooms coming online, Ernst & Young has said.

In a new report on the hotel industry in the Middle East and North Africa, it said the emirate had proved its "magnetic attraction as a tourist attraction".

Yousef Wahbah, MENA head of Transaction Real Estate, Ernst & Young, said: "Dubai has been successful in attracting a larger share of the GCC tourism market as well as penetrating the US and China markets more effectively as it is considered a stable and open market, boosting overall performance figures.

"Despite the large increase in the number of available rooms in Dubai in 2011, overall RevPar has not been affected which proves Dubai's magnetic attraction as a tourist destination."

Dubai was the sole tourist destination in the region that has shown a rise in both occupancy (4 percent) and revenue per available room (revPAR) (4.5 percent) with a very slight decline in room rates (down 0.2 percent).

In Abu Dhabi, occupancy rates for January to November 2011 were up two percent on the same period of 2010 while average room rates fell by 8.6 percent.

The UAE capital also saw a 6.2 percent drop in revPAR, the data showed.

Ernst & Young's latest statistics showed that Cairo and Bahrain have been worst hit by the political upheavals that hit the region last year.

Cairo's hotel occupancy has slumped by 36 percent in the year from January to November while Bahrain's rate fell by 29 percent.

According to Ernst & Young, average room rates in Bahrain to November 2011 were 11.9 percent down on the same period the previous year.

In both market, revenue per available room, one of the key indicators for the hotel market, were affected "considerably", Wahbah said.

Elsewhere in the Gulf region, Ernst & Young data showed that Kuwait hotels saw a one percent drop in occupancy rates for the first 11 months of 2011 compared to 2010, while average room rates were up by 5.8 percent.

In Qatar, occupancy for January to November last year rose by one percent while average room rates fell by 5.8 percent.

Hotels in Muscat, Oman saw occupancy rates drop by two percent while average room rates rose by 3.2 percent.

In Saudi Arabia, Riyadh was the best performer for occupancy rates with a three percent rise year-on-year while the holy city of Madinah fared best for average room rates, showing a 5.1 percent rise for the first 11 months of the year.