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Fri 5 Feb 2016 12:57 AM

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Dubai hotels see further declines in room rates in December

New survey shows that average rates fall 4.6% while occupancy remains stable at just over 80%

Dubai hotels see further declines in room rates in December

Four- and five-star hotels in Dubai continued to experience weakening average room rates (ARR) in December, falling 4.6 percent to $315.79, according to a new survey of hoteliers.

The HotStats survey also said that occupancy levels remained strong, albeit marginally lower than the same period last year at 80.2 percent.

Hoteliers in the emirate witnessed a 5.9 percent decrease in revenue per available room (RevPAR) which was compounded by significantly lower food and beverage revenues which fell 18 percent, driving total revenue per available room (TRevPAR) 10.3 percent lower to $434.16.

The survey also showed that higher operating expenses compounded lower overall revenues, reducing gross operating profit per available room (GOPPAR) by 14.3 percent to $201.45.

Weaker economic activity continued to impact Doha's hotel market as demand levels fell 3.4 percent to 66.4 percent in December, the survey said.

The fall in demand coupled with a 13.9 percent reduction in ARR to $196.85 resulted in RevPAR falling 18.2 percent to $130.69. Weaker food and beverage performance impacted total revenues with TRevPAR falling 13.5 percent to $330.74.

Hotel profits followed the downward trend with GOPPAR falling 21.3 percent to $119.45.

Although hoteliers in Abu Dhabi were able to maintain stable average rate performance, occupancy levels fell 5.5 percent in December, impacting key performance figures.

The drop in demand levels resulted in RevPAR falling 6.9 percent to $130.86 and TRevPAR reducing 7.6 percent to $268.49. Marginally higher operating expenses compounded the fall in revenues, driving GOPPAR 14.8 percent lower to $86.53.

In Jeddah, hotels witnessed continued softening of demand in December with four and five star hotels recording a 6.2 percent reduction in occupancy to 65 percent.

Hoteliers were unable to offset the falling demand as ARR fell by 7.2 percent to $237.09. The decreased occupancy levels had a negative effect on the remaining performance indicators with RevPAR and TRevPAR falling 15.2 percent and 13 percent respectively.

Higher operations expenses compounded lower revenues with GOPPAR dropping 30.6 percent to $94.40.

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