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Tue 1 Aug 2006 04:00 AM

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Hotel rates wilt in the harsh summer sun

Occupancy and room rates plummeted across the Middle East in May as the summer heat kicked in. This gave agents the green light to switch their focus from intra-regional bookings to more lucrative international sales

Agents booking intra-regional travel in May probably noticed more limited revenue-earning opportunities on accommodation bookings as room rates slumped.

The latest HotelBenchmark Survey by Deloitte revealed that as the temperature started to rise, occupancies and prices plummeted, although Riyadh in Saudi Arabia was an exception to the rule, reporting growth in all fields.

Riyadh and Doha were the only markets to not record an occupancy drop against May 2005.

Average room rates were up in all markets compared to 2005 figures, but also showed either a stagnation or a decline against April 2006 numbers, proving that market fluctuations are back in force for the summer.

Amman’s hotel market continued to fight peaks and troughs as occupancy dived to 63.2%, down 15.5% on May 2005 figures.

However, RevPAR showed growth for the fourth consecutive month to hit US $73.

Cairo also presented a mixed bag for May; occupancy fell 2.1% on the previous year, and dropped 10.9% against April, while both average room rate and RevPAR showed growth on 2005 figures, at $82 and $54 respectively.

Doha continued to play catch up with Dubai on all fronts, and in May, the Qatari capital gave the emirate a real run for its money.

Doha hotels recorded occupancy of 79.2% against Dubai’s 80.7%.

In the financial stakes, the two cities were also tied.

Doha’s hotels made average room rate of $234 compared to Dubai’s $239, while RevPAR in Doha was

$185, marginally below Dubai, which recorded RevPAR of $193.

However, Dubai did still have a confident lead in the year-to-date figures; average room rate in the emirate was $277, compared to Doha’s $242.

Muscat’s hotels witnessed a downturn, with occupancy dropping 13.8% on 2005 to scrape 61.2% — the lowest in the survey.

Average room rate was also down, at $148, while RevPAR fell below the $100 mark, at $90.

Meanwhile, Riyadh proved an ongoing success story, with pluses across the board on 2005 figures.

The Saudi capital saw occupancy hit 84.7%, up 11.2% on 2005, and up 1.7% on April.

Average room rate rose 17.4% on 2005 to make $157, while RevPAR leapt 30.5% to achieve $133.

Find out in the next issue of ATN whether Riyadh’s growth proved sustainable throughout the summer or burnt out in the heat.

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