UAE Hotels witness dip in occupancies for July 2012

UAE Hotels witness dip in occupancies for July 2012

According to the latest HotStats survey of full service hotels in six MENA cities by TRI Hospitality Consulting, hotel performance levels for Dubai and Abu Dhabi during the month of July highlighted the double impact of summer and Ramadan. Occupancy levels in Dubai fell 11.0 percentage points to 70.0% in July while Average Room Rate (ARR) increased by 6.4% to US$188.51.

Additionally, the onset of Ramadan caused a notable decrease in food and beverage revenues as well. The 8.2% drop in TRevPAR and the increase in costs including the 5.5 percentage points rise in Payroll caused a dent in the bottom line, dragging GOPPAR down by 30.6% to US$45.18.

Abu Dhabi continued to demonstrate a decline in performance with a reduction in all performance indicators. Occupancy dropped 4.5% to 57.1% while ARR dropped 8.4% to US$104.95 causing a 15.1% drop in RevPAR during the month. As in the other GCC markets, Abu Dhabi too saw a considerable decline in food and beverage revenues last month due to the restrictions on sale and consumption of food and alcohol during Ramadan. The decline in all performance metrics coupled with an increase in payroll costs resulted in a 40.4% drop in GOPPAR compared to the same period last year to US$24.33.

“Our data for Dubai and Abu Dhabi highlights the effect of the culmination of the low seasons as we saw Ramadan, which is a traditional low demand period, moving into the peak summer period last month. Although performance levels are expected to improve in both cities after Ramadan, Abu Dhabi is likely to face continued pressure from increased competition especially when additional hotels including the Ritz Carlton enter the market at the end of 2012 and early 2013″ said Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai.

Gary Marshall
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