By Staff writer
CBRE report says despite declining performance, Dubai remains one of the best markets in the GCC
Dubai's average hotel occupancy rate dropped around 3.5 percent during the first six months of 2016 versus the same period last year, according to a new report by real estate consultancy CBRE.
Its Q2 2016 Dubai MarketView added that average daily room rates (ADR) dropped by around 10 percent, resulting in a 13.1 percent dip in revenue per available room (RevPAR).
CBRE said that despite the declining performance, Dubai remains one of the best performing markets in the GCC, with various cities in Saudi Arabia, Qatar and Oman experiencing far more severe declines, as a result of lower prices, the US dollar strength and the negative impacts of a subdued economy and lower corporate demand.
Mat Green, head of Research & Consulting UAE, CBRE Middle East, said: "Hotel operators in Dubai have made widespread cuts to their ADRs throughout Q2, as they strive to remain competitive during a period affected by lower spending capacities and seasonal demand drops.
"Although the Dubai hotel market performance has softened, looking ahead, it will see increases in tourist numbers, boosted by lower temperatures and city events such as Dubai Summer Surprises and Cityscape Global," he added.
The report also showed that prime office rentals in Dubai are expected to remain firm throughout the remainder of the year.
It said the commercial property market is currently offering limited availability of existing and upcoming high-quality Grade A supply, which is encouraging a new wave of commercial development.
Average prime yearly gross rentals have remained unchanged at AED1,920 per square meter per annum in Q2, CBRE said.
According to the Dubai MarketView, the prime office rentals market has witnessed a strong pick-up in pre-leasing activity over the past two years reflecting demand for high quality single owned office accommodation.
Green said: "The prime office rental market has potential for growth in well located buildings around the CBD and popular locations such as TECOM Freezone, with its most recent extensions, the Edge and the Butterfly, almost fully leased out even before their expected completions later in Q3."For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.