By Andy Sambidge
Latest TRI Hospitality data shows profits significantly higher than other GCC cities
Hotels in Dubai reported growth in revenues and profits while Abu Dhabi continue to experience a decline in rates and profits in April, according to the latest HotStats survey by TRI Hospitality Consulting.
Revenue per available room (RevPAR) in Dubai increased 9.4 percent to $311.12 in April, the highest level in three years, driven by a 8.6 percent growth in average room rRate (ARR) to $359.51 and a 0.6 percent rise in occupancy.
In terms of gross profits, Dubai saw a growth of 7.2 percent in GOPPAR to $265.84, significantly higher than the other GCC cities surveyed by HotStats.
TRI Consulting said that hotels in Dubai benefited from "consistently strong corporate and leisure demand" along with a series of regional and global events held in the city during the month.
Peter Goddard, managing director of TRI Hospitality Consulting, said: "Dubai witnessed strong leisure demand in April due to the regional school holidays occurring within the first week of the month, boosting ARR and TRevPAR performances.
"Large regional and global conferences continued to increase ARR performance with this segment generating rates 11.6 percent above the same period last year, indicating that hotels in Dubai are not only able to maintain high occupancy levels, but also charging rate premiums during peak periods of demand," he added.
Performance levels for hotels in Abu Dhabi continued to drop in April compared to the same period last year.
A reduction in occupancy levels by 3.6 percent to 69.3 percent coupled with a 11 percent fall in ARR to $140.79, resulted in RevPAR dropping 15 percent to $96.60.
"Abu Dhabi hotels are continuing to take a hit in profitability, driven by falling ARR, occupancy and increasing payroll costs," said Goddard.
"Our HotStats data indicates that the high competition for corporate demand has resulted in a 13.1 percent fall in average rates generated by the segment.
"With no sign of recovery insight in the coming months, this is likely to lead to further declines in performance levels as we move in the summer months," added Goddard.
In Saudi Arabia, hotels in Riyadh and Jeddah saw mixed results in April.
Hotels in Riyadh recorded a marginal fall in occupancy and ARR by one percent and 5.6 percent respectively to 69.9 percent and $258.25, resulting in a RevPAR of $180.56.
Jeddah hotels recorded stronger hotel performance than Riyadh with a 3.1 percent increase in occupancy and a 3.9 percent rise in RevPAR to 79.6 percent and $169.20 respectively.
There are about 65km left between Dubai and Abu dhabi and in 30 years it will be built. So there are no competition and nothing to worry about between the two. One will benefit from the other. If you visit one even today you are bound to visit the other. When people said Dubai and UAE are finished in 2009 I told them they aren't because the population of the world will increase therefore visiting demographics will increase too.