Dubai’s hospitality sector outdoes regional growth

The Ajman Palace Hotel Overall hospitality market recorded an average occupancy rate of 87 per cent in January 2014, a slight drop from January 2013 of 2.6 per cent. Driven by a buoyancy in tourism and business, Dubai's hospitality market continued to outperform an upbeat regional trend, posting around 10 per cent jump in average room rates in January 2014 compared to the same 2013 period despite the entry of nearly 3,000 new hotel rooms last year, a research report by Ernst & Young said.
The market has rapidly absorbed the influx of new hotel room supply and continued to perform exceptionally well, showing a jump in average room rates from US$308 in January 2013 to US$337 January 2014, resulting in an increase in revenue per available room, or RevPAR, of 6.2 per cent over the same period, said Yousef Wahbah, Mena Head of Transaction Real Estate at EY.
Overall hospitality market recorded an average occupancy rate of 87 per cent in January 2014, a slight drop from January 2013 of 2.6 per cent but far outpacing the regional rate.
EY's data on Dubai hotel occupancy rate is higher than the 83.6 per cent reported for January by a recent Mena Hotstats survey which showed that the average room rate in the emirate increased by 10.8 per cent to reach US$402.15 in January, boosting RevPar by 9.5 per cent to US$347.17 on the back of record air passenger traffic.
In 2013, over 2,780 new hotel rooms within the four and five star hotel segments were added to Dubai's room supply during 2013, according to EY. Dubai hotels maintained a healthy occupancy of 80 per cent in 2013 with an increase of 6.4 per cent in average daily rate, or ADR, resulting in a RevPAR of US$223 in 2013, an increase of 5.9 per cent on 2012.
Yousef Wahbah, MenaHead of Transaction Real Estate at EY, pointed out that January 2014 was another positive month for the hospitality industry in the Middle East, with several GCC cities, also including Doha and Muscat, witnessing robust increases in their hospitality Key Performance Indicators (KPIs).
"As usual for the winter months, the GCC recorded positive growth across its key hospitality markets, with its mild winter weather, numerous tourist attractions and events attracting tourists from across the region and from around the globe.”
Wahbah said the performance of Dubai's hospitality market improved month on month, with average occupancy growing by approximately five per cent, coupled with an increase in average room rate from US$305 in December 2013 to US$337 in January 2014.
"These increases can be largely attributed to the peak tourism season in Dubai. January's mild winter weather, coupled with the high number of tourist attractions in the Emirate, continues to draw visitors to Dubai over the winter months,” he said.
In 2013, Dubai's air passenger traffic soared 15.2 per cent to 66.43 million compared to 57.68 million recorded during 2012 as the city drew more than 10 million visitors.
A recent report by STR Global said only Dubai could achieve a double-digit ADR growth in the Middle East and Africa in January this year, reflecting the sustained buoyancy of the city's tourism sector.
During January, Doha's hospitality market recorded average occupancy levels of 70 per cent, an increase of around nine per cent over the same period last year. The increase is primarily due to the growth in business travel to the country, as several project tenders have been issued in relation to the Qatar World Cup in 2022.
Doha International Airport announced a record 2.2 million passenger travelling in January 2014, up by approximately 18 per cent from January 2013.
"Muscat's hospitality market also witnessed an increase in RevPAR of 15.5 per cent in January 2014 compared to January 2013, mainly due to a healthy growth in average occupancy from 71 per cent to 85 per cent during the same period.
Saudi Arabia saw notable surge in its hospitality sector in January. Madina's overall occupancy reached 82 per cent and Makkah's reached 86 per cent, increasing by 13 per cent pp and 18 per cent respectively from January 2013. Madina also witnessed an increase in RevPAR by 14.9 per cent in January 2014 compared to January 2013. Riyadh's occupancy rate also increased, by three per cent, and the occupancy rate in Jeddah increased by one per cent.
Jordan also recorded a promising performance in its hospitality industry in January, with Amman's overall occupancy rate increasing by four per cent pp and RevPAR increasing by eight per cent.
"January 2014 was a strong month for the Mena hospitality market. The region's hospitality sector is off to a strong start in 2014, and EY continues to predict robust growth through the remainder of the year,” said Wahbah.
Source: Khaleej Times