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Tue 17 Mar 2020 10:48 AM

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Coronavirus: Dubai's hotel occupancy levels drop by almost 30% amid Covid-19 impact

Dubai's occupancy, average daily rate and revenue per room decreased for 37 consecutive days from February 1 through to March 8

Coronavirus: Dubai's hotel occupancy levels drop by almost 30% amid Covid-19 impact

STR analysts found that Dubai’s occupancy, ADR and RevPar decreased for 37 consecutive days from February 1 through to March 8,

Occupancy levels in Dubai’s hotels dropped by almost 30 percent year-on-year for the first week of March, according to STR, as the impact of coronavirus hammers home on the emirate’s hospitality industry.

Average daily rate (ADR) dropped 20.4 percent to AED498.13, while revenue per room (RevPar) fell 42.9 percent to AED301.68.

STR analysts found that Dubai’s occupancy, ADR and RevPar decreased for 37 consecutive days from February 1 through to March 8 as the coronavirus spread throughout the world and countries began imposing travel restrictions.

Philip Wooller, area director – Middle East and Africa, said the effects of the Covid-19 outbreak came off the back of positive results for January this year, which saw occupancy rates at 86 percent (up 16.9 percent year on year); ADR at AED703 (up 0.8 percent) and RevPar up 8.7 percent to AED609.

He said: “Things changed very very quickly, like they did with the oil crash in 2014, it was almost instantaneous. We started to see things decline quite quickly from January 20.”

Wooller added that, over the last couple of weeks, there has been an “accelerated decline” in all three indicators.

Stopped bookings

Earlier this month, Emaar Hospitality announced it was stopping taking bookings at three hotels in Dubai – Address Fountain Views, Vida Creek Harbour and Vida Emirates Hills - for more than five months as it temporarily “refocuses” on certain assets amid the ongoing coronavirus pandemic.

Robin Rossmann, managing director of STR, said: “It is likely that this picture is going to look even worse in the coming weeks as the impact of government shut-downs on travel really starts to be felt.”

Despite the negative comparisons for Dubai, STR analysts highlighted the market’s ability to sell six out of every ten rooms on average during the first week of March.

Sounding a note of optimism, Rossmann said: “The thing to keep in the back of your mind and help maintain calm is that this is a pandemic driven by a virus which, once solved, I think we all hope, we’ll see a quick recovery.”

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