By Andy Sambidge
Ernst & Young study also shows occupancy rates fall in Abu Dhabi, Doha and Kuwait
Hotels in Dubai have seen average room rates rise by more than eight percent in the first half of 2012 while occupancy has also improved by three percent, a study by Ernst & Young has showed.
Its Middle East Hotel Benchmark Survey said Dubai's average occupancy hit 84 percent between January and June, compared to 81 percent in the same period last year.
Average rates reached $251 compared to $231, an increase of 8.4 percent while room yield rose 12.7 percent to $212.
In contrast, Abu Dhabi, which has seen an influx of new supply over the past few months, saw occupancy rates remain flat at 78 percent.
Average rates in the UAE capital slumped nearly 12 percent to $195 while room yield also fell more than 11 percent ot $154, the survey showed.
Elsewhere in the Gulf, all four cities in Saudi Arabia surveyed by Ernst & Young saw occupancy rises in the first half of 2012.
Jeddah's rate rose by eight percent to 81 percent, Riyadh rose by one percent to 64 percent while the holy cities of Madinah and Makkah both witnessed five percent increases, according to Ernst & Young.
However, occupancy rates in Doha fell by five percent to 62 percent as new supply reached the hotel market.
In Kuwait, occupancy fell by three percent to 53 percent while hotels in Manama, which had been badly hit by the uprisings in Bahrain, saw occupany rebound by 12 percent to 38 percent.
Oman also saw a rise in occupancy as Muscat hotels posted a three percent rise to 71 percent.
Yousef Wahbeh, MENA head of transaction real estate at Ernst & Young said: “Despite having entered the typical low season for tourist travel in most of MENA, which will last until the onset of Eid or the beginning of September, Dubai hotels have continued to demonstrate growth year-on-year.
"Even with a negligible increase in occupancy rates compared to last year and despite the fact that hundreds more rooms have been added since June 2011, the overall RevPar has shown an impressive 11.5 percent increase since then.
"This is largely on the back of room rates increasing by more than 10 percent since last year and also due to the increased efficiency in operations in Dubai hotels.”