Why RAK hospitality is rocking

Dubai - Emirate's market has outperformed its UAE neighbours

Bucking wider regional trends, Ras Al Khaimah's hospitality market has emerged as one of the UAE's tourism bright spots by recording year-to-date occupancy growth of 13.6 per cent.
With well over 5,000 hotel and hotel apartment rooms in its inventory, Ras Al Khaimah's hospitality market has outperformed its UAE neighbours, recording year-on-year occupancy growth well above the national average, according to the Ras Al Khaimah MarketView by global real estate consultancy firm CBRE.
In the third quarter, Ras Al Khaimah's hotels recorded further growth in occupancy rates and revenue per available room (RevPAR), aided by the early timing of the holy month of Ramadan, which led to higher visitation during July as compared to the previous year.
Mat Green, head of research and consulting for the UAE at CBRE Middle East, said year-to-date occupancy rates have averaged over 70 per cent (up from 62 per cent in the previous year), and with high visitation months during the final quarter, these figures are likely to increase by the end of the year.
"The concerted efforts of the RAKTDA [Ras Al Khaimah Tourism Development Authority] and quasi-government developers in raising the emirate's profile within international markets appears to be succeeding, reflected in the continued growth in visitor numbers which are up around 10 per cent to 613,000 year-to-date to September versus the same period last year. These figures are expected to reach 820,000 for 2016 as a whole, as per estimates from the RAKTDA," said Green. "The emirate has relatively small number of developments in the immediate short-term pipeline, so we would expect to see a continuation of these positive performances, sustained by rising visitor numbers and an improving tourism infrastructure."
The next major phase in the evolution of Ras Al Khaimah's hotel market will really start from 2019 with the expected completion of a wave of new large resort hotels, many of which will be first time entrants to the local market. According to the MarketView, Ras Al Khaimah's residential market experienced further deflationary pressures during third quarter, with rental rates falling by around two per cent quarter-on-quarter, taking the annual decline to over five per cent. However, performance has been aided by the low levels of new supply within the emirate's master-planned communities.
Apartment lease rates in the developments of Al Hamra Village and Mina Al Arab are faring comparatively well; on a per-unit-per-annum basis, a two-bedroom unit ranges from Dh60,000-Dh70,000 and Dh65,000-Dh75,000, respectively. A two-bedroom villa in Mina Al Arab ranges from Dh85,000-Dh90,000 and a three-bedroom villa from Dh110,000-140,000 depending on the size, view and location in the masterplan.
Limited new residential supply has ensured Ras Al Khaimah's real estate market has not had to go through the price and rental volatility recorded in Dubai and Sharjah during the first half of the year, CBRE has said. Gated communities in Ras Al Khaimah have outperformed the rest of the residential market within the emirate, according to a recent update from CBRE.
- issacjohn@khaleejtimes.com

• Ras Al Khaimah