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Dubai hotels outshine Mena peers in occupancy, revenue

Filed on August 8, 2017
Dubai hotels outshine Mena peers in occupancy, revenue
Dubai hotels' revenue per available room stood at $209 in the first half.

(File photo)

Emirate taps Mice, leisure sectors and revises visa policies to attract more tourists

Dubai's hospitality industry enjoyed the highest occupancy and revenue per available room (RevPar) in the Middle East and North Africa (Mena) region during the first half of this year.

Hotels in Dubai boasted 79.3 per cent occupancy in H1 followed by 76 per cent in Abu Dhabi and 74.6 per cent in Ras Al Khaimah. All the three emirates topped the occupancy list in Mena, according to the EY Middle East Hotel Benchmark Survey Report.

Similarly, Dubai hotels' RevPar stood at $209 in the first half, followed by Makkah ($171) and Jeddah ($167). In addition, Ras Al Khaimah and Abu Dhabi hotels recorded RevPar at $119 and $92 respectively.

Yousef Wahbah, Mena head of transaction real estate at EY, said the emirate has continued to focus on increasing tourism by means of meetings, incentives, conferences and exhibitions (MICE) events, leisure attractions, diverse hospitality supply and revised visa policies, which have all contributed to its current performance.

Overall, hospitality markets witnessed a softer performance in the first half of 2017 when compared to H1 2016. The majority of markets experienced a drop in RevPar due to a slower global economy and an increase in supply in some markets like Saudi Arabia and the UAE.
Hospitality markets in Cairo, Makkah and Beirut witnessed the highest RevPar growth in the region during H1 2017 when compared to H1 2016.

Challenges
"The hospitality market continues to be affected by the drop in oil prices and challenging economic conditions, which has led to more conservative spending in the government and private sectors as well as among regional tourists. The summer months, typically seen as the low season in the majority of Mena hospitality markets, are expected to experience lower occupancy and room rates compared to the first half of the year.

"Starting September, we expect to see an increase in the hospitality market performance in some of the Mena cities due to the Hajj pilgrimage, global forums and regional events being hosted across the region, and regional trips during long weekends for upcoming holidays," Wahbah said.

Cairo experienced an increase in occupancy of 4.7 per cent points and an average daily rate (ADR) growth of 86.7 per cent, resulting in a RevPar growth of 101.7 per cent in H1 2017 when compared to H1 2016. A stabilised political situation in the country and increased inbound international travel has contributed to the improvements in performance.

Kuwait city also saw an increase in occupancy by 5.2 per cent points to 51.5 per cent in H1 2017 compared to the previous year. While the ADR dropped by 4.7 per cent, the city's RevPar increased by six per cent in H1 2017 when compared to H1 2016.

Beirut witnessed an increase across all hotel performance indicators. An ADR and occupancy increase by 6.6 per cent and 6.6 per cent points respectively led to a 19.3 per cent increase in RevPar in H1 2017 when compared to H1 2016.

- waheedabbas@khaleejtimes.com


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