Dubai hotel rates and revenues in decline

Revenues and rates at Dubai hotels continued to fall in the first four months of 2016 despite occupancy holding at about 87 percent, according to the latest data from HotStats.

Although occupancy remained strong in the first four months of 2016, it has been at the expense of a significant drop in average room rate, which fell by 9.6 percent year-to-date, equivalent to a $31.87 decline, HotStats said.

As a result of the movement in occupancy and achieved average room rate, year-on-year revenue per available room (RevPAR) for Dubai hotels fell by 10.5 percent year-to-date to $258.04 from $288.24 in the same period in 2015.

However, food and beverage revenue rebounded by 1.7 percent this year, a reversal of a 15.3 percent decline since December 2014.

In addition, Dubai hotels recorded a 17.2 percent year-on-year increase in conference and banqueting revenue per available room, to $20.39 from $17.40 in 2015.

HotStats said the increase in ancillary revenues helped to temper the decline in total revenue per available room (TrevPAR) to -6.6 percent in the four months to April but despite savings in both labour (1 percent) and overheads (2.9 percent) on a per available room basis, profit per room at Dubai hotels dropped by 11.4 percent year-to-date.

Profit per room at Dubai hotels has now declined by 22.7 percent in the 36 months to April on a rolling 12-month basis, the figures showed.

Dubai welcomed 4.1 million overnight visitors in the first three months of 2016, a 5.1 percent increase over the same period last year, official figures showed in April.

 The increase was backed by strong double digit growth from its top two proximity markets, the GCC and India, according to figures released by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism).

Dubai skyline