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Thu 23 Jul 2020 03:30 PM

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UAE hotels record increasing occupancy post-Covid lockdown

Hotels and F&B outlets in the UAE have seen an uptick in business since the easing of movement restrictions

UAE hotels record increasing occupancy post-Covid lockdown

Another major success story for the hospitality industry came in the form of increased demand for serviced and hotel apartments. Image: ITP Media Group

UAE hotels are continuing to see an improvement in business, with occupancy levels rising in recent weeks thanks to staycations and long-term stays. 

Dubai hotels occupancy fell to 26.3 percent in June 2020, a 61.7 percent drop compared to the same period for last year according to the latest from data and analytics specialist STR.

The data also revealed a drop in average daily rate (ADR) by 28.9 percent to AED275.75, while revenue per available room (RevPAR) dropped by 72.2 percent to AED72.65.

In comparison to May 2020, however, ADR and RevPAR were slightly up but occupancy levels were lower as compared to the previous month.

Ghaya Grand Hotel, located in Dubai Production City, reported a “critical drop in occupancy” during the first week of March. The “unusually low” occupancy figures were triggered by cancellation of advance bookings which mainly come from China, the hotel’s marketing manager Sreedevi Shyam told Arabian Business.

However, the easing of movement restrictions in the UAE has resulted in a jump in visitors and business.

Fairmont Ajman general manager Kosta Kourotsidis said his property was “very fortunate” to have resumed to healthy occupancy levels, which are “higher over the weekends and slow down across the weekdays”. Kourotsidis said: “We won’t hit 90 percent mark [occupancy] in the coming months for many reasons because of the social distancing measures we’ve implemented.”

Long-term stays

Meanwhile, hotel and serviced apartments have seen a surge in demand with residents looking at the mid- and long-stay options to navigate the uncertainty with their futures in the country.

JA Oasis Beach Tower on The Walk JBR maintained a healthy occupancy of 35 percent throughout the “challenging period”.

The hotel’s VP of sales and marketing at the hotel Thomas Grundner, said: “[We have witnessed this performance] due to the long stay guests and residents at the property. Our strategy is generally 40 percent long term and 60 percent short term for deluxe serviced apartments. Though we lost the short-term business for a few months due to the pandemic, we were able to stay open unlike many of our counterparts in the market. Now we are keen to gain back some short-term business as travel restrictions ease."

Shyam added: “[In the absence of demand for hotel room] our luxury serviced apartment offering came into demand. The hotel apartment saw an increase in number of tenants during the lockdown, which continues until date with occupancy levels on the rise with each passing day.”

The food and beverage industry is also making a strong comeback following the lockdown lull.

Adel Ghazzawi, co-founder, Cove Beach, said: “Like all hospitality businesses, Cove Beach was impacted by Covid and the temporary closure of the venue. For the first four weeks post-lockdown, revenue was down by 85 percent as guests were only allowed to use a small portion of the facility, while beach and pools remained closed. As soon as the restrictions were lifted we saw footfall return to near normal levels and are now averaging 1,600 guests each week."

Capital increase

The Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) reported a three percent increase in hotel occupancy for the first two weeks of July 2020 as the emirate gradually reopens.

Dubai opened its borders to tourists on July 7, with hotels reopening facilities and airports increasing operations to bring in international visitors. HH Sheikh Ahmed bin Saeed Al Maktoum, CEO and chairman of the Emirates Group says some hotels have experienced up to 80 percent occupancy over weekends.

Initiatives such as the ‘Dubai Assured’ stamp, which is being handed out to restaurants, hotels, shops and attractions, are also expected to help. The stamp is a means of reassuring patrons hat an establishment has implemented all the necessary public health protocols for the prevention and management of Covid-19.

Meanwhile, Abu Dhabi has launched a similar campaign with its ‘Go Safe’ certification.

Earlier in April the Ras Al Khaimah Tourism Development Authority (RAKTDA) put together a comprehensive contingency plan, which mapped out short, mid to long term solutions to mitigate the negative impact of the virus on travel to the UAE’s northernmost emirate.

These include the Financial Incentive Package, which was made available to non-government owned entities covering midscale and four-star hotels, golf courses and tourism attractions.

Raki Phillips, CEO, Ras Al Khaimah Tourism Development Authority (RAKTDA), said: “Specific measures of the initiatives include six-month waiver of all touristic licenses; waiver of tourism dirhams from March to May; 100 percent waiver of tourism licensing fees for Q2/Q3 and tourism licensing fines until September 30; and participating fees for exhibitions and roadshows for 2020/21 dropped.

"These measures alone have provided demonstrable relief for our hotels and combined with our real time support. We have the ability to be agile in shaping our strategy as we navigate through this period. 

Shyam is confident that the worst is behind us. She is looking forward to Expo 2020, set to be hosted from October 2021, given Ghaya Grand’s proximity to the Expo 2020 site. “[We cannot wait for] things to pick up once international travel is back to normal, we will surely bounce back to business,” she concludes.

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