A busy conference season and a rise in room rates are expected to keep Abu Dhabi hotels in the black as profitability increased in the first half of the year.
Occupancy levels improved 4.9 percentage points to touch 78.2 per cent, while the average room rate was US$151.68 versus US$151.61 during the same period last year, according to TRI Hospitality Consulting Middle East.
The gross operating profit per available room, or the bottom line profits, rose to US$81.18 during the first six months, compared with US$72.61 last year.
In June, the average daily room rate increased by 4.8 per cent to US$122.30, and the occupancy rate was 69.7 per cent, up by about 5 percentage points over last year. Conferencing activities pushed the gross operating profit per available room up 31.3 per cent to US$31.39 over June last year.
"The steady growth in occupancy has helped hoteliers maintain rates during the first half of the year,” said Rashid Aboobacker, a senior consultant with TRI Hospitality Consulting. "We expect that hotels in Abu Dhabi will be looking to leverage the strong occupancy and continued demand growth to push rates higher in a bid to improve top and bottom line performance levels.”
With some key conferences heading to the capital city in the second half of the year, the hotels scene is expected to remain busy. Among the conferences are the Chinese Visitor Summit towards the end of the month, when about 75 Chinese tour operators will meet their local counterparts. In October, the capital will host the 12th edition of three-day food safety and sustainability-focused Global GAP Summit at Jumeirah at Etihad Towers. The last conference in Madrid attracted 400 participants from 50 countries.
Other events in the city include Sial Middle East, a food and beverage industry trade event, in November at Abu Dhabi National Exhibitions Centre. Last year, Sial Middle East attracted about 17,000 attendees and 700 exhibitors from 52 countries.
The growth in demand for the capital's hotel rooms coincided with an increase in passenger numbers for Etihad Airways during the first six months of the year.
Etihad carried 6.7 million passengers between January and June, up by 22 per cent year on year. The national carrier will launch six routes in the first half of next year. It will begin daily flights to Madrid, Edinburgh, Kolkata and Entebbe in Uganda, it will also introduce direct services to Hong Kong and Algiers.
Also next year, its daily flights to Brisbane, Australia that currently stopover in Singapore will become a direct service from June.
"As the capital of the UAE and one of the fastest growing cities in the Middle East, Abu Dhabi is a key market for IHG and we see strong potential for all our brands with demand being driven across the leisure, corporate and [meetings, incentives, conferences, and exhibitions] segments,” according to Pascal Gauvin, the regional chief operating officer for InterContinental Hotel Group.
The hotel chain has five properties in Abu Dhabi with three in the pipeline for the city in the next five years.
Source: The National