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Mon 18 Jan 2016 01:38 PM

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Dubai hotel rates, occupancy fall further in November

HotStats survey of five- and four-star hotels shows average room rates decline by nearly 7%

Dubai hotel rates, occupancy fall further in November
(AFP/Getty Images)

Five and four star hotels in Dubai continued to experience weakening average room rates (ARR) in November, falling 6.9 percent to $315.03, according to a new report.

The HotStats survey also showed that occupancy levels remained strong, albeit marginally lower than the same period last year at 84.9 percent.

The 8.1 percent decrease in revenue per available room (RevPAR) was compounded by significantly lower food and beverage revenues which fell 12 percent, driving total revenue per available room (TRevPAR) 10.9 percent lower to $449.80, the report added.

Higher operating expenses compounded lower overall revenues, reducing gross operating profit per available room (GOPPAR) by 15.8 percent to $214.83.

The report also showed that the continued low oil prices are starting to have an impact on Doha's hotel market as demand levels fell in November with occupancy levels dropping 5.5 percent to 75.1 percent.

The fall in demand impacted all remaining performance indicators with ARR and RevPAR dropping 12.8 percent and 18.8 percent respectively.

Higher F&B demand offset the softer room revenue but it was not sufficient enough to prevent GOPPAR reducing 24.4 percent to$142.99.

Jeddah hotels also witnessed softening demand levels in November with four and five star hotels recording a 3.8 percent reduction in occupancy to 70.7 percent.

The report said hoteliers were unable to offset the falling demand as ARR fell by 3.8 percent to $245.05. The decrease in occupancy levels had a negative effect on the remaining performance indicators with RevPAR and TRevPAR falling 8.8 percent and 3.8 percent respectively.

Higher operations expenses compounded lower revenues with GOPPAR dropping 21.2 percent to $108.23, it added.

The HotStats survey showed occupancy levels plunged in Sharm El Sheikh in November following the crash of a Russian civilian airplane early in the month. A subsequent ban on travel and cancellation of flights to the region from Russia and various European countries severely impacted performance in the Rea Sea destination.

Occupancy levels fell 25.9 percent to 36.2 percent, resulting in a 42 percent drop in RevPAR to $17.94. Fixed payroll expenses compounded the fall in top line revenues, pushing profit margins to their breaking point with GOPPAR dropping to $1.24.

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