By Staff writer
STR data shows rates average about $152 over past year compared to $353 peak of seven years ago
Revenue per available room (RevPAR) levels in Dubai peaked in October 2009 at $353.90, with average rates now much less than half that, according to industry consultants STR.
Rates have averaged around $152 over the past year as hotels have cut charges to remain competitive but STR client relationships director Sarah Duignan has said hotel demand will outpace supply by 2020.
The data was shared at the Hotelier Express Summit 2016, held at the Grosvenor, Dubai, Hotelier Middle East reported.
She said supply currently outpaces demand in the region while there are 10,202 additional rooms due to open in Dubai before the end of 2016.
“According to STR data, supply continues to increase in the Middle East/Africa region (+2.9 percent in Q2compared with Q2 2015). This, in combination with a 4 percent drop in demand, resulted in declines across all KPIs for the region,” Duignan said.
The data shows that this downward hotel performance trend will continue over the next few years, until demand growth resumes in the run-up to Expo 2020.
However despite the downward trend, the data also shows that the Middle East is the biggest growth market for new hotels as a percentage of existing supply.
“Low oil prices, currency volatility, supply increases and safety concerns (in some countries) still continue to affect the Middle East and Africa’s hotel performance,” Duignan added.
According to data predictions, by 2017 occupancy levels and supply will be very strong. While there will be some growth in 2018 with the focus on Expo 2020 but the biggest growth will be in 2021, according to STR’s November forecast.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.