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Sat 10 Oct 2015 01:07 AM

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Luxury Dubai hotels see 10% revenue slump in August

HotStats report says both RevPAR and average rooms rates show double digit declines

Luxury Dubai hotels see 10% revenue slump in August
(AFP/Getty Images)

Four- and five-star hotels in Dubai reported weakening performance levels in August, with revenue per available room (RevPAR) declining 10.1 percent to $147.45 for the month compared to the same period last year, according to a new report.

Figures from hospitality data firm Hotstats said that due to a marginal rise in occupancy levels by 0.6 percent, the contraction in room revenues was led largely by average room rates (ARR) falling 10.8 percent to $196.49.

The drop in room revenues also impacted total revenue per available room (TRevPAR) which fell 10.6 percent to $271.01, the report said.

It added that profitability levels remained under pressure as key operating expenses rose, causing gross operating profit per available room (GOPPAR) to drop by 9.8 percent to $69.10.

The report said hotels in Doha also witnessed weakening performance metrics in August as RevPAR declined by 11.1 percent to $111.14, as soft demand forced hoteliers to drop rates in order to maintain market share.

ARR fell by 11.7 percent to $190.04, while occupancy increased by a marginal 0.3 percent to 58.5 percent. A surge in F&B revenues helped offset the lower room revenues but failed to escalate profits for hoteliers, with GOPPAR falling 17.7 percent to $80.64.

Hotel demand in Jeddah continued to flourish, as hotels reported a 4.5 percent increase in RevPAR for the month of August, compared to the same period last year, HotStats showed.

The surge in room revenues was driven by a 6.3 percent rise in occupancy levels, offsetting a 3.3 percent drop in ARR to $286.66 for the period.

The spike in hotel guests had a trickle-down effect on other hotel services, as F&B revenues increased, allowing TRevPAR to grow 5.6 percent. Complemented by a reduction in payroll expenses, profitability was boosted by the steady increase in top line revenues with GOPPAR growing by 8.8 percent to $177.47.

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