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Sat 3 Dec 2016 10:47 AM

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UAE hotel rates in October slump to lowest level since 2005

Latest data from STR reveals October was 22nd consecutive month of year-over-year average daily rate decreases

UAE hotel rates in October slump to lowest level since 2005
Dubai, real estate, skyline, property

Hotels operating in the UAE continued to see declines in occupancy and room rates during October, according to the latest data from industry consultants STR.

It said the UAE's hospitality sector reported an occupancy dip of 2.9 percent during the month to 75.6 percent, while average daily rates (ADR) dropped 9.6 percent to AED668.05, the lowest for an October since 2005.

As a result, revenue per available room (RevPAR) declined by 12.3 percent to AED505.34.

STR said October was the 22nd consecutive month of year-over-year ADR decreases in the UAE, due in part to consistent and significant supply growth, which is up by 5.1 percent year to date). At the same time, demand has remained strong, up 5 percent year to date.

In Dubai, hotels saw occupancy fall by 2 percent to 78 percent, ADR was down 9.8 percent to AED764.63 and RevPAR dropped 11.6 percent to AED596.16.

STR said strong supply growth (up 5.8 percent year to date) has slightly outpaced a year-to-date demand increase (up 5.6%) in the market. In addition to the strong development pipeline, STR analysts attributed Dubai’s performance to a decline in visitors from the drop in oil prices.

In Riyadh, Saudi Arabia, STR reported decreases in occupancy (down 7.2 percent to 56.2 percent), ADR (down 3.6 percent to SR796.30) and RevPAR (down 10.6 percent to SR447.46).

STR said as one of the Gulf’s key hubs, Riyadh is heavily dependent on corporate travel but that business has suffered with the drop in oil prices, and coupled with significant supply growth (up 8.9 percent year to date), Riyadh’s performance has slumped.

Regionally, hotels in the Middle East reported a 4.4 percent decrease in occupancy to 64 percent, a 9 percent drop in ADR to $174.19 and a 13 percent decline in RevPAR to $111.48.

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khalid 2 years ago

still expensive for consumers. while for the corporate world it might be value for money; but business are looking for ways to avoid spending in this tough and challenging economic climate.

Red Snappa 2 years ago

This comes as no surprise as further new hospitality properties come into the market and dilute it still further, the number of rooms basically outstrips demand' Plus if Saudi Arabia does go into recession in 2017 as reported by AB quoting a new report, then rates will continue to deteriorate. There are still new hotels slated for construction.

Telcoguy 2 years ago

@khalid if you are flying people mostly from Europe and Asia Dubai hospitality is currently great value. Flying with QA makes it usually cheaper, or if you have a meeting in other GCC country and then make a stop over of 2-3 days. It is interesting that this place is more interesting now as a meeting point than as a permanent FOB
@Red Snappa good thing that our official resident expert has decided that low oil prices will not affect Dubai economy.

One Guy 2 years ago

They are going to need to drop significantly more if the hundreds of hotels are looking to continue to attract international tourists for either few day stop overs or holidays.

Coincidentally, I have ended up speaking in passing to several random holiday makers recently at various hotels, they have all commented that as regular visitors that the cost these last few years and particularly this year of everything surrounding their stay, from F&B to shopping etc has really surprised them at how expensive it has become, to the point where they probably wont be making the trip again...........