Abu Dhabi and Dubai maintained strong occupancy levels at 73.5 percent and 77.8 percent respectively in May but witnessed a decrease in revenue per available room (RevPAR), according to new data.
EY's MENA Hotel Benchmark Survey Report said Dubai’s hospitality market saw a decline in RevPAR by 11.6 percent in May, mainly due to the reduction in average daily room rate from $225 in May 2016 to $211 a year later.
It also showed that Abu Dhabi’s hospitality market witnessed a drop in RevPAR by 20.3 percent from $92 in May 2016 to $73 last month.
The decrease was mainly due to the average room rate being lowered from $119 to $100, along with a decline in average occupancy by 3.8 peercent when compared to May 2016.
Yousef Wahbah, MENA head of transaction real estate at EY, said: “The majority of the MENA hospitality industry experienced a decrease in earnings during May as both lower occupancies and lower average room rates reduced overall revenue per average room."
EY said thaat in Saudi Arabia, Jeddah saw the highest occupancy rates for the region at 80.2 percent and the highest RevPAR at $247 in May.
Moreover, the hospitality markets in Madinah and Makkah experienced positive gains in RevPAR when compared to May 2016.
Madinah’s hospitality market witnessed an increase in average occupancy of 6.1 percent. Average daily room rates also increased to $180, resulting in an overall boost in RevPAR by 12.2 percent.
Makkah’s hospitality market witnessed an increase in RevPAR of 90.5 percent when compared to the same period last year. The rise was mainly due to the average room rate nearly doubling to $275 in May.
Makkah was able to maintain occupancy levels of 41 percent year-on-year, the EY report added.
The increase in Madinah and Makkah’s hospitality market may be attributed to the beginning of the holy month of Ramadan where many worshippers prefer to perform Umrah and visit Madinah.
Wahbah said: "Jeddah, Makkah, and Madinah are expected to continue this strong trend due to the holy month of Ramadan. As Eid Al-Fitr is expected to fall on the 25th of June, it is anticipated that certain touristic destinations across MENA will experience strong performance during the last week of June.”
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.