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Sat 7 Nov 2015 01:53 AM

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Dubai hotels continue to see rates weaken in September

Latest HotStats report shows average room rates down 2.3% while occupancy is marginally lower at 76.6%

Dubai hotels continue to see rates weaken in September
(AFP/Getty Images)

Five and four star hotels in Dubai continued to experience weakening average room rates (ARR) in September, falling 2.3 percent to $207.55, according to the latest HotStats survey.

Occupancy levels remained stable, albeit marginally lower than the same period last year at 76.6 percent, it said, adding that the reduction in revenue per available room (RevPAR) was compounded by significantly lower food and beverage revenues which fell 19 percent.

The combination drove total revenue per available room (TRevPAR) 8.1 percent lower to $282.55 in September.

Slightly higher operating expenses compounded the lower overall revenues, reducing gross operating profit per available room (GOPPAR) by 8.7 percent to $84.66, the survey added.

Although Kuwait generally benefited from increased demand during the Eid Al Adha holiday period due to its proximity to Saudi Arabia, the market saw demand levels fall in September with occupancy dropping 8.5 percent to 42.6 percent, according to the HotStats survey.

It said the lower demand was more heavily linked to softer activity from the government and corporate markets which is slowing due to the lower oil prices.

The fall in demand had a negative impact on all remaining performance indicators with ARR and RevPAR dropping 0.7 percent and 17.2 percent respectively. Lower F&B demand compounded the softer room revenue and resulted in GOPPAR reducing by 14.6 percent to $100.02.

The survey also said that four and five star hotels in Manama benefited from the extended Eid Al Adha holiday with the market witnessing a 4.3 percent increase in occupancy to 60.7 percent.

The influx of regional visitors, particularly from Saudi Arabia, allowed hoteliers to generate a 7.3 percent increase in ARR to $202.26. The increase in both occupancy and ARR fuelled growth in all performance indicators with TRevPAR increasing 10.1 percent to $185.31 and GOPPAR expanding 18.1 percent to $67.90.

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