Dubai hotels post strong revenue, profit growth

posted on 05/07/2012: 879 views

Hotels in Dubai reported strong growth in revenues and profits while hotels in Abu Dhabi continued to report drop in rates and profits in May 2012, according to the latest survey by TRI Hospitality Consulting.

The HotStats survey, conducted in six Middle East and North African cities, said revenue per available room, or RevPAR, in Dubai increased 9.6 per cent to US$195.47 in May driven by a 6.5 per cent growth in average room rate (ARR) to US$247.96. In terms of profits, gross operating profit per available room (GOPPAR) for the month saw a growth of 12.4 per cent to US$145.93.

The emirate's hotels also recorded a nominal increase of 2.3 percentage point in occupancy to 78.8 per cent compared to the same month last year as corporate demand replaced by the leisure segment, which is attracted to the discounted rates and packages offered during the summer season.

"The strength of Dubai's hotel market was once again shown in May with hotels improving in all areas of performance, especially with occupancy increasing to 78.8 per cent,” Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said in an e-mail statement to Khaleej Times on Wednesday.

The Mena chain hotels sample for the survey was composed of 84 hotels with an average hotel size of 330 bedrooms in four and five-star segments. The survey was conducted in full-service hotels of Dubai and Abu Dhabi (UAE); Riyadh and Jeddah (Saudi Arabia); and Cairo and Sharm El Sheikh (Egypt).

Goddard said the spending power of visitors at Dubai hotels was highlighted by a 9.7 per cent increase in total revenue per available room (TRevPAR) to US$372.21, driven by a 24.7 per cent increase in food and beverage spend to US$147.93, accounting for 39.7 per cent of TRevPAR.

"Although historically the summer months result in lower occupancies in the GCC, we believe Dubai will continue to attract high demand as the leisure segment particularly from Saudi Arabia and Kuwait, and some demand from Europe who exploit the attractive rates and packages on offer during this period,” Goddard added.

Nasser Shams, director sales and marketing, HUES Boutique Hotel Dubai, said the occupancy in the UAE is reaching at a good level while average daily rates are climbing. "We see a positive and continued growth in the region's tourism industry,” he said.

Abu Dhabi hotel occupancy falls

Performance levels for hotels in Abu Dhabi continued to drop in May compared to the same period last year. A marginal reduction in occupancy levels by 0.7 percentage points to 64 per cent coupled with a 14 per cent fall in ARR to US$128.67, resulted in RevPAR dropping 15 per cent to US$82.33. The fall in revenues resulted in a GOPPAR of US$69.79, 17.3 per cent lower than the same period last year.

"Our HotStats data for Abu Dhabi hotels in May further reiterates the overall reduction in rates, occupancy and profitability witnessed in 2012. Hotels have seen ARR and RevPAR fall by 16.5 per cent and 15.6 per cent, respectively, since January 2012 resulting in a 20.8 per cent decline in profitability.

"We do not envision the situation to improve in the UAE capital in the near future as corporate and conference demand continues to slow on the back of lower business activity, especially in the wake of the continuing European debt crisis,” said Goddard. – Khaleej Times

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