By Staff writer
Achieved average room rates slump by more than 9% year-on-year while RevPAR also falls by nearly 10%
Achieved average room rates at four- and five-star Dubai hotels continued to decline into 2016, recording a 9.3 percent year-on-year decrease in January, to $312.83, according to the latest HotStats survey.
The January decline follows a 6.7 percent drop during 2015, the survey said.
It added that as a result of the drop in achieved average room rate, revenue per available room (RevPAR) at hotels in Dubai fell by 9.7 percent for the month compared to the year-earlier period.
In addition to the pressure on hotel demand as a result of plummeting oil prices, the upscale hotel sector in the UAE capital is being equally affected by additions to supply, the survey noted.
As well as an oversupply in the luxury sector, there was significant growth in development in the mid-market segment as Dubai attempts to increase its appeal to more price sensitive travellers. The opening of more than 1,000 hotel rooms in the mid-market sector in 2015 has put downward pressure on average room rates at upscale hotels, it added.
The decline in rooms revenue was further compounded by declines in food and beverage (-0.9 percent) and conference and banqueting (-4.5 percent) revenue in January, contributing to a 7.3 percent decline in total revenue per available room(TrevPAR) and a 13.5 percent year-on-year drop in profit per room.
The survey also showed that profit per room at hotels in Kuwait City recorded a 15.7 percent year-on-year decline in January, led by a 5.9 percent decrease in RevPAR, to $118.66, as the demand for accommodation continues to suffer amid the current oil price slump.
As in other GCC countries, accommodation demand associated with the oil industry has fallen away. For hoteliers this has been evidenced in the 12.5 percent decline in the achieved rate in the corporate segment in the 15 months to January 2015, as well as the overall continued drop in occupancy levels.