Dubai hotels sustain revenues despite falling demand

Dubai hotels sustain revenues despite falling demand

Hotel occupancies fell in March due to increased supply, while rising rates sustain RevPAR growth

Hotel occupancies fell in March due to increased supply, while rising rates sustain RevPAR growth

 The latest data from Dubai’s hospitality sector shows that supply is outgrowing demand, resulting in falling occupancies, while increased room rates help to maintain revenues.

Dubai Marina cityscape, UAE

Commenting on the March hotels data, Elizabeth Winkle, managing director of STR Global, said; “While demand growth was strong, it did not keep pace with new supply, resulting in negative occupancy performance for the market.”

Dubai’s hotel industry recorded an annual increase in supply of 7.4% in March, while demand lagged behind slightly at 6.2%. This caused a minor dip in occupancy rates compared to March 2012, falling 1.2 points to 87.2%.

Meanwhile, average daily rates increased 4% over the last 12 months to AED1,089.82 (USD296.7).

“The increase in rate managed to offset the negative occupancy trend, leading to an overall positive revenue per available room (RevPAR) performance for the month,” Ms Winkle said.

STR Global recorded RevPAR growth of 2.8% year on year to AED950.68.

Gary Marshall
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Gary Marshall
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