Tourism boosting Ras Al Khaimah
Ras Al Khaimah witnessed a 10 per cent year-on-year increase in the number of international guest arrivals during the first half of 2017.
Ras Al Khaimah - Market experiences another positive quarter with over 197,000 guests confirmed
Ras Al Khaimah's property market has continued to experience a slightly fragmented performance, with positive growth in the tourism and hospitality sectors, but with further deflationary trends in other parts of the real estate market, according to the latest Ras Al Khaimah MarketView by global real estate consultancy firm CBRE.
The emirate's tourism market experienced another positive quarter with over 197,000 guests confirmed. This brought the half-year figure to 390,499 against an annual target of 900,000 visitors, equating to a 6.5 per cent increase over the same period last year.
There was also a 10 per cent year-on-year increase in the number of international guest arrivals during the first half of the year, while total guest nights rose 17.7 per cent, average length of stay rose by 10.5 per cent to 3.9 days and room revenue leapt 13.3 per cent.
With visitor numbers steadily increasing and with limited new supply being added to the market, the emirate's hotels have continued to generate positive occupancy growth, with a six per cent increase in year-to-date average occupancy rates, according to data from STR.
Average occupancy rates for the last six months to June reached 75.1 per cent, versus 70.9 per cent for the same period in 2016. Importantly, RevPAR figures also trended up, as a 0.6 per cent increase in ADRs and the positive occupancy performance resulted in a 6.6 per cent increase in the first-half year-to-date RevPAR. This translated into Dh456 per room per night, versus Dh426 per room per night for the same period in 2016. Overall room revenue also experienced positive growth, rising 10.1 per cent over the same period last year.
Mat Green, head of research and consulting for the UAE at CBRE Middle East, said: "With the emirate's continued hotel expansions and the completion of the new Hilton Garden Inn in May, Ras Al Khaimah is set to reach an estimated total of close to 6,500 rooms by the end of 2018."
According to the MarketView, from 2019 onwards, room supply will start to increase at a quicker pace, driven by the handover of new large scale resort properties in locations such as Al Marjan Island and Mina Al Arab, amongst others.
"Ras Al Khaimah's residential market continues to suffer from weaker demand fundamentals and the added pressure of declining rentals in neighbouring Emirates, which combined have brought about further downside in rental performance," added Green.
Average rental rates in popular freehold locations such as Al Hamra Village and Mina Al Arab witnessed a dip of around two per cent during the quarter, taking the full-year decline to six per cent.
Average rentals for a studio unit in Al Hamra Village and Mina Al Arab range from around Dh22,000-30,000 per unit per annum, one-bedrooms from Dh35,000-50,000 per unit per annum, and two-bedrooms from around Dh60,000-70,000 per unit per annum.
Subsequent to the handover of the Bermuda Villas at Mina Al Arab earlier in the year, and the ongoing delivery of the Pacific project on Al Marjan Island, completion of new freehold properties in the emirate will see a period of relatively low supply, until deliveries start to increase again from 2019 onwards.