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Online bookings soar as UAE hotels profits surge

Issac John
Filed on July 8, 2013

Amid a sharp surge in occupancy rates across hotels in the UAE, online bookings are also steadily gaining popularity as more consumers use the Internet to search for affordable hotel rates.

While Dubai hotels posted 30.9 per cent growth in gross operating profit per available room (GOPPAR), a 14.7 percentage point surge in occupancy boosted it by 31.6 per cent in Abu Dhabi, the latest HotStats survey reveals.

Hotel revenue per available room (RevPAR) in Dubai was boosted by a 6.6 percentage point growth in occupancy to 83.9 per cent and 8.5 per cent growth in average room rates (ARR) to $282.72. Consequently, total revenue per available room (TrevPAR) grew 14.9 per cent to $439.51, boosting GOPPAR up 30.9 per cent to $192.73, said the survey report by TRI Hospitality Consulting Middle East covering full service four and five star hotels.

Hotels in Abu Dhabi saw continuing decline in ARR which fell 8.3 per cent to $124.68 in May, however, RevPAR grew 15.1 per cent percent, driven by an impressive 14.7 percentage point surge in occupancy to 72.1 per cent. Supported by the growth in room revenue, TrevPAR increased 12.2 per cent, driving GOPPAR up 31.6 per cent on last year to $61.37.

Peter Goddard, managing director of TRI Hospitality Consulting in Dubai, said Abu Dhabi and Dubai have demonstrated strong growth in bottom line performance during May. “Dubai exhibited particular strength in its key performance indicators, enhanced by the hosting of high-profile international events and growth in leisure demand. In Abu Dhabi, RevPAR levels have seen some improvements over the last few months driven by strong growth in occupancy levels which have now returned to the pre-crash levels, however declining average rates continue to plague the city’s hotels.” According to PhoCus Wright’s Middle Eastern Online Travel Overview, in 2012, hotel bookings from the GCC region totaled $1.6 billion, 10 per cent of which were made online hotels across the UAE are well aware of their guests’ growing preference for online bookings.

In Abu Dhabi, the newly launched Nehal Hotel reported that nearly half of their rooms were now booked online. Samer Al Kabalan, General Manager of the Nehal said the online travel industry in the Middle East is growing at a rapid pace. “So far this year we have seen 45 per cent of our bookings come from online sites.”

However, as analysts pointed out, with hundreds of hotel websites now available, consumers today face an overwhelming abundance of choice. To further complicate matters, these sites often post different rates for the same hotel, causing users to spend hours comparing prices online.

“With so many websites available for online hotel booking, it’s hard for the consumer to know offhand where the best rate available is posted. A hotel room will always have different rates on different booking sites. Thanks to HotelsCombined, travellers can find the best room rate in just a single search,” said Amer AlHalabi, Regional Manager of Mena for HotelsCombined.

Tourist arrivals in the UAE are forecast to grow at a compound annual growth rate of 5.3 per cent between 2012 and 2022, with hotel supply also expected to increase from the current 96,992 hotel rooms in Dubai and Abu Dhabi, to a total of 125,383 hotel rooms in 2016.

The latest Ernst & Young Middle East Hotel Benchmark Survey shows that Dubai’s hospitality market witnessed positive growth on all key performance indicators through the first quarter 2013 compared to the same period last year. During 2012, approximately 3,500 new branded hotel rooms were added to Dubai’s hotel supply, including three major 5-star hotel openings – Tower 1 JW Marriot Marquis, Rayhaan by Rotana and Fairmont - The Palm. An additional 500 branded rooms were introduced during the first quarter, including Ocean View Hotel and the Ritz Carlton Jumeirah Beach extension.issacjohn@khaleejtimes.com





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