Dubai Hotels Excel in Profit Levels in the Region in 2013 with a 7.6% Rise in RevPAR
Issac John | Khaleej Times, Dubai, United Arab Emirates | January 31, 2014 1:00am
Jan. 31--The emirate plans to double its visitor numbers in seven years.
Hotels in Dubai reported the highest profit levels in the region in 2013 for the fourth consecutive year, and ended the year with occupancy above 80 per cent as rates surged, according to the latest HotStats survey of full service four and five star hotels in five Mena markets by TRI Hospitality Consulting Middle East.
In December, Dubai continued to record strong performance levels reflecting the continued growth experienced throughout the year. Although the market witnessed a 4.5 percentage points decline in occupancy to 79.5 per cent, a 9.1 per cent rise in Average Room Rates (ARR) to $368.22 drove Revenue Per Available Room (RevPAR) growth of 3.2 per cent to $292.70, the report said.
Data compiled by STR Global also shows that hotel sector in Dubai and the UAE in general has been on an upswing.
With Expo 2020 in the offing, Dubai plans to double its visitor numbers from 10 million to 20 million in seven years.
Philip Wooller, area director of Middle East and Africa for STR Global, said it would be a fascinating journey for Dubai. Announcements will soon be released for all the new projects in the run up to the event, Wooller said. "The numbers alone suggest the hotel supply will need to nearly double from the existing 68,000 rooms to 120,000 rooms."
In December, the Middle East/Africa region reported positive results with a 3.0 per cent increase in occupancy to 59.5 per cent, a 4.2-per cent increase in average daily rate to $180.65 and a 7.3-per cent increase in revenue per available room to $107.44.
According to HotStats, average rates and RevPAR for Dubai hotels in December exceeded levels witnessed throughout the year and helped push year to date figures up 6.5 per cent and 7.6 per cent, respectively. Bottom line performance levels in December were boosted by a 2.8 per cent rise in Total Revenue Per Available Room (TRevPAR), which was driven by increased MICE revenues and coupled with lower operating costs. Gross Operating Profit Per Available Room (GOPPAR) for the month increased 3.9 per cent to $260.00 and helped drive year to date figures up 10.3 percent to $206.05, the report said.
Peter Goddard, Managing Director of TRI Hospitality Consulting, said occupancy levels in December 2013 were marginally lower than December 2012, which is attributed to an increase in supply compared to the same period last year; however average rates were maintained by the minimum stay agreements imposed by hotels during the festive season. "A combination of stable demand and increased confidence in the market resulted in hoteliers applying more aggressive yielding strategies which resulted in average rates rising 6.5 per cent to $324.44 in 2013," said Goddard.
Jeddah witnessed growth in all key performance indicators for the month of December as corporate demand surged in the city. The combined effects of a 5.2 percentage point rise in occupancy to 73.3 per cent coupled with a 1.9 per cent increase in ARR drove RevPAR up 9.7 per cent to $171.05 in Jeddah
Doha hotels experience stronger demand, however rates and profits continue to fall. "Doha Hotels continued to struggle to elevate key performance indicators which remained under pressure during December, despite a 3.1 percentage point rise in occupancy to 63.3 per cent. On-going rate reductions resulting from high levels of competition fuelled a 20.8 per cent decline in ARR to $226.99 which in turn, drove RevPAR down 16.8 per cent to $143.71," the report said.