Dubai's hotels report strong RevPAR and profit growth during September, shows HotStats survey

Hotels in Dubai reported strong RevPAR and profit growth during the month of September 2011 as the city emerged out of the low demand summer and Ramadan seasons, according to the latest HotStats survey of full-service hotels in six regional cities by TRI Hospitality Consulting.

Since the beginning of 2011, Dubai's tourism and hotel sector has witnessed strong signs of recovery as the 'Arab Spring' diverted both international and regional tourists to safer locations such as Dubai. Both occupancy and average rates improved in September as Ramadan moved into August while September opened with the commencement of Eid Al Fitr holidays. This annual festival witnesses a marked increase in the flow of domestic and regional leisure travellers to Dubai, causing a surge in hotel bookings.

The strong recovery in demand this year (78.6% occupancy compared to 71.8% in September 2010) prompted hoteliers to increase rates by 10.9% in September, resulting in a 21.5% growth in RevPAR and a 24.6% growth in GOP PAR for the month. Dubai hotels' year-to-date GOP PAR of $110.10 is 30.9% higher than its neighbouring city of Abu Dhabi and second only to Riyadh amongst the six cities covered in this survey.

"Dubai hotels have clearly benefited from the Arabic Spring and such trend is unlikely to change until there is greater stability in the hot spot areas of Egypt and Syria. However, with the uncertainty related to the ongoing economic problems in the Euro region, there is a downside risk that the European tourist inflow into Dubai may decline, which might slightly dampen the year-end figures," said Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai.

In Abu Dhabi, Dubai's richer neighbour and UAE's capital, however, things appear to be moving in a different direction. Hotels in this emirate continued to see room rates (ARR) drop, with a 7.0% decline in September, although occupancy levels improved by a similar margin assisted by the growth in demand during the Eid holidays. During the 12 months to September 2011, Abu Dhabi posted the largest decline in ARR amongst the six cities surveyed, plunging 20.9% compared to the same period in the previous year.

Conversely, demand levels in Abu Dhabi have seen consistent growth as reflected by the occupancy change for September (up 7.5%), year-to-date (up 8.4%) and 12 months to September (up 7.1%) 2011. According to Abu Dhabi Tourism Authority, the number of hotel guests rose 14% in the first nine months of this year compared to the same period last year. "Regardless of the growth in demand, the continued growth in supply, albeit at reduced levels compared to the last couple of years, is likely to maintain the pressure on rates and increase the risk of oversupply in Abu Dhabi in the short to medium term," commented Mr. Goddard.

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Source : AMEinfo.com