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Sat 25 Apr 2015 09:36 AM

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Abu Dhabi hotels see first daily rates rise since 2010 in Q1

New JLL report says Abu Dhabi's is closing the hospitality performance gap on its neighbour Dubai

Abu Dhabi hotels see first daily rates rise since 2010 in Q1

Hotels in Abu Dhabi witnessed the first increase in annual daily rates (ADR) since 2010 in the first quarter of 2015, according to real estate firm JLL.

Despite heavy competition in the Abu Dhabi market, ADR levels increased to reach about $169, reflecting an increase of 12 percent in the year to February.

Occupancy rates witnessed a far lower rate of growth, reaching 77 percent in the first two months of 2015, just one percent higher than 2014.

The combined growth of improved ADR levels and occupancy rates pushed the revenue per available room (RevPAR) up by 14 percent, to reach approximately $132, JLL said.

Two major openings occurred during Q1 - Tryp by Wyndham (146 keys) and the Swiss-Belhotel Corniche (189 keys) while 500 keys were added to the serviced apartments sector with the opening of the Meera Time Residence in Saraya and Danat Residences in Danet Abu Dhabi.

David Dudley, regional director and head of Abu Dhabi Office at JLL MENA, said: "Over recent years, while there has been a steady increase in tourism arrivals, the positive increase in demand was largely offset by new supply coming through, impacting on performance.

"While we expect an additional 3,000 rooms to enter the market by the end of 2015, the pace of supply additions is now slowing down the extensive government initiatives to boost tourism numbers continue strongly."

He added: "In the first quarter of 2015, in contrast to the downward pressure we saw for the hospitality market in Dubai during the quarter, the Abu Dhabi hotel sector saw an increase in hotel ADRs for the first time since 2010 as demand outpaced supply expansion.

"The growth in hospitality demand is largely driven by a range of ongoing government initiatives to grow tourism demand - including the expansion of Etihad Airways and the airport, further enhancement of Abu Dhabi's leisure offering, and campaigns by the Abu Dhabi Tourism & Culture Authority to promote Abu Dhabi regionally and globally."

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