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Tue 1 Apr 2014 02:24 PM

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Dubai hotel occupancy, room rates soar in February

New data shows four- and five-star properties post average 87.6% occupancy while RevPAR jumps more than 7%

Dubai hotel occupancy, room rates soar in February

Dubai's four- and five-star hotels registered an occupancy rate averaging 87.6 percent in February, according to the latest data from HotStats.

The strong performance was boosted by a plethora of events which attracted large numbers of international visitors which allowed hoteliers to increase yields with the market witnessing an 8.7 percent surge in average room rates (ARR) to $366.99.

Revenue per available room (RevPAR) also jumped 7.3 percent to $321.59, while an increase in leisure demand in the city contributed a four percent and 3.8 percent rise in food and beverage revenues respectively, the data showed.

Total revenue per available room (TRevPAR) grew 5.8 percent to $554.93 and a slight reduction in payroll costs helped hotels register an 8.6 percent increase in gross operating profits per available room (GOPPAR) to $282.09.

Peter Goddard, managing director at TRI Hospitality Consulting in Dubai, said: “Dubai’s stellar hotel performance continued in February as strong occupancy and increasing average rates resulted in Gross Operating Profits exceeding 50 percent of total revenue.

"Strong economic activity within the city coupled with a consistent rise in visitor numbers has driven demand for Dubai’s hotels, especially food and beverage demand with revenues increasing over 4 percent from the same period in 2013.”

Abu Dhabi hotels struggled in February as average rates fell throughout the month, the HotStats survey said. Although occupancy levels in the capital increased 3.3 percent reaching 80.2 percent, ARR plummeted 18.1 percent to $162.46, reducing RevPAR by 14.6 percent to $130.36.

“Although hotels in Abu Dhabi continued to report strong occupancies, the market experienced an 18.1 percent decline in average rates compared to the same month last year. This was largely due to the exceptional performance witnessed during February 2013 when Abu Dhabi hosted IDEX, a biennial mega-event which allowed hotels to command significantly higher average rates," said Goddard.

"This year, the lower average rates significantly impacted room revenues that were further suppressed by increased rooms expenses and payroll costs.”

The low performance registered by Kuwait hotels in February was attributed to outbound travel during the national holiday which caused occupancy to slump 10.2 percent to 48.4 percent.

A 1.2 percent rise in ARR to $280.66 was insufficient to negate the fall in occupancy which drove RevPAR down 16.4 percent to $135.91.

“Hotels in Kuwait were heavily impacted by the extended national and school holidays that resulted in reduced corporate demand and an outflow of residents. The 10 day ministry holiday prompted residents to travel to other regional destinations such as Jeddah and Dubai, with Kuwait witnessing limited internal activities,” said Goddard.

Hotels in Jeddah reported growth across all major performance indicators as an increase in average rates and non-room revenues boosted the bottom line yields.

Occupancy for the month posted a growth of 1.5 percent to 79.3 percent, rising for the fourth consecutive month.

ARR increased 5.2 percent to $252.22, boosting RevPAR by 7.2 percent to $199.98.

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