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Sat 8 Mar 2014 10:40 AM

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Abu Dhabi hotels post double digit RevPAR growth

Latest HotStats survey also delivers positive figures for Dubai and Doha hotels in January

Abu Dhabi hotels post double digit RevPAR growth

Hotels in Abu Dhabi posted double digit growth in revenue per available room (RevPAR) in January on the back of strong growth in occupancy levels and average room rates (ARR), according to the latest HotStats survey by TRI Hospitality Consulting.

Abu Dhabi hotels reported a 7.6 percent growth in ARR to $165.07 in January, while occupancy climbed 5.4 percent to 74.7 percent, the report said.

The combined effects of a rise in both performance indicators drove RevPAR growth by 16 percent and closed the month at $123.37.

The survey said the increase in ARR was primarily driven by the corporate and conferencing segments as a result of demand generated from high profile events such as the Abu Dhabi HSBC Golf Championship and Abu Dhabi Sustainability Week.

The growth in the top line, combined with a 2.6 percent drop in payroll costs, resulted in a 35.9 percent surge in profit margins during the month, the data showed.

Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said: "January is typically a robust month of performance for hotels in Abu Dhabi and this year was no exception as continued growth was seen across all key indicators."

The survey also showed that record-high air passenger traffic helped hotels in Dubai maintain robust performance levels during the month of January.

Occupancy levels in Dubai reached 86.3 percent and ARR increased by 10.8 percent to $402.15 during the month, boosting RevPAR by 9.5 percent to $347.17.

It said higher average rates were largely attributed to higher yield from the leisure segment, as visitors took advantage of holidays such as the Orthodox Christmas and New Year and the extended New Year break in China.

The growth in the top line revenues, coupled with a decline in operating expenses, drove an increase in profits during the month.

Goddard added: "Hotels in Dubai successfully yielded higher average rates on the back of strong leisure demand during the month of January.

"In addition, the annual Dubai Shopping Festival occurred throughout the entire month of January and based upon initial estimates saw a 5-10 percent rise in shoppers, with the GCC and East Asia maintaining their position as the top source markets."

Elsewhere, Doha hotels reported a 10.9 percent growth in occupancy in January and closed the month with an average occupancy of 70.5 percent.

However, ARR dropped 1.2 percent to $225.37 while RevPAR witnessed growth of 16.9 percent to $158.91.

"Rising competition in the city continues to impede further growth in profits as new entrants launch aggressive strategies in order to penetrate the market", said Goddard.

Riyadh hotels saw a drop in performance during January which was driven by a 14.2 percent drop in ARR. Although occupancies increased 3.9 percent to 58.1 percent, the growth was insufficient to negate the impact of falling average rates as the city witnessed an 8.1 percent decrease in RevPAR to $142.91, the report said.

Kuwaiti hotels registered an eight percent drop in occupancy to 51.8 percent on the back of lower demand in the city. Although ARR increased 10.3 percent to $315.63, the decline in occupancies drove RevPAR down 4.4 percent to $163.62.

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