By Andy Sambidge
Strong growth in demand drives 10.9% rise in revenue per available room, says survey
Abu Dhabi hotels experienced a rise in all major performance indicators in November driven by a number of prominent events and an increase in leisure demand, according to the latest HotStats survey.
November is historically the strongest month of the year for Abu Dhabi and this year was no different with hotels seeing further growth as occupancies reached 85 percent, an increase of 7.8 percent from the same period in 2012.
Average room rates (ARR) experienced a slight revival with a 0.8 percent increase to $246.74, becoming the second highest rates in the region, the survey data showed.
The strong growth in demand drove a 10.9 percent increase in revenue per available room (RevPAR) closing the month at $209.71.
The increase in ARR was led by a surge in demand from the leisure segment while occupancy levels benefitted from strong corporate activity and demand originating from city wide events.
A rise in beverage and conferencing revenues helped to boost total revenue per available room (TRevPAR) by 11.4 percent to $387.55, which in turn, drove profitability up 11.7 percent to $188.44, the highest level registered in 2013.
Peter Goddard, managing director of TRI Hospitality Consulting Middle East, said: "Momentum has rapidly picked up in Abu Dhabi's hotel market that has seen consistent growth in demand this year, particularly from the leisure segment.
"In year to date terms, occupancies are 10.9 percent higher than the same period in 2012 and have helped boost top line revenues which have filtered through to the bottom line, driving a 24.1 percent increase in profitability."
Elsewhere, Kuwait registered the highest top line growth across the five MENA markets surveyed by HotStats.
ARR recovered from the particularly low base witnessed in November 2012 caused by political turmoil, soaring 36.8 percent to $331.96.
Occupancies increased 3.8 percent to 62.5 percent, driving RevPAR growth of 45.7 percent to $207.44.
"The Kuwaiti hotel market witnessed a rebound in performance during November from the low levels experienced during the same period last year, which were affected by ongoing political and civil protests," said Goddard.
Riyadh hotels reported a 5.3 percent rise in occupancy to 69.1 percent in November compared to the same month last year while ARR declined by 6.7 percent to $239.59. As average rates were sacrificed to raise occupancy levels, overall room revenues increased with RevPAR posting a 1.1 percent growth to $165.63.
Goddard added: "The month of November saw the top line and bottom line performance in excess of those witnessed during the first 10 months of the year, giving the kingdom's key market a much needed boost to the end of the year performance."
Four and five star hotels in Doha recorded mixed results in November with occupancies increasing 2.7 percent to 73.3 percent but ARR fell 14.7 percent to $231.20.
A significant reduction in average rates resulted in RevPAR declining by 11.4 percent to $169.40.
"The Doha hotel market continues to show positive results with an increase in occupancies not only during the month of November, but throughout 2013. This is a positive sign for the Qatari market. However, the corporate segment remains highly competitive especially for new hotels, pushing down overall rate performance with average rate for the segment falling 12.3 percent in 2013," said Goddard.