We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sat 5 Mar 2016 01:01 AM

Font Size

- Aa +

Dubai hotel rates continue to decline in January after 2015 drop

Achieved average room rates slump by more than 9% year-on-year while RevPAR also falls by nearly 10%

Dubai hotel rates continue to decline in January after 2015 drop

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.

Arabian Business: why we're going behind a paywall

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.