Dubai hotels buck regional downturn

DUBAI — Hotels in Dubai bucked a severe downturn in the Middle East hospitality sector with an occupancy of 79 per cent and a revenue per available room of $199.14 — highest regional scores recorded for the first two months of 2010 — Deloitte, a leading global consultancy and auditing firm, said on Tuesday.

In contrast, Abu Dhabi hotels recorded a sharp decline in occupancy as well as in revenue per available room (RevPAR) even as hotel occupancies across the Middle East region slumped by 25.7 per cent to 59.9 per cent during the period year-to-date February 2010.

RevPAR in the Middle East also slipped to $131.42 from $151.51 during the first two months, Deloitte said in its latest analysis of selected STR Global hotel performance data for the Middle East for the period year-to-date February 2010.

Overall, Dubai hotels posted an 11.5 per cent surge in occupancy rate this year compared to the same 2009 period “owing to Dubai’s promotional strategies,” Deloitte said.

However, Dubai’s RevPAR for the two months showed a drop compared to $204.55 in the corresponding period in 2009, as most hotels slashed room rates to lure holidaymakers.

According to industry watchers, Dubai room rates have been reduced by as much as 40 per cent by some operators to keep up occupancy. “If January-February could be so high, occupancy in March is expected to be even higher,” a hotel industry source said.

Dubai hotels’ two-month combined occupancy is better compared to January when the emirate’s hotels posted 72.1 per cent, up from 67.9 per cent during the previous yea while RevPAR was just $180.09.

“The upswing signals a recovery of Dubai’s hotel sector, and we expect the high rates to sustain till April,” a leading tour operator said.

Occupancy in Abu Dhabi hotels declined to 55.7 per cent during the first two months from 81.4 per cent in the corresponding 2009 period while RevPAR plummeted more than 50 per cent to $142.47 from $300.60 during the same 2009 period, Deloitte said in its analysis of selected STR Global hotel performance data for the Middle East for the period year-to-date February 2010.

Abu Dhabi hotels recorded a sharp decline in occupancy to 55.7 per cent during the first two months of this year compared to 81.4 per cent in the corresponding 2009 period. In January, Abu Dhabi occupancy rates fell to 56.5 per cent, representing a decline of 27.1 per cent from 77.5 per cent during January 2009.

The capital city also saw its RevPAR dropping by 40.5 per cent in January 2010 to $208.7 compared to the same period in 2009.

Overall, in 2009, the UAE performed well, with Abu Dhabi securing the Middle East’s highest average room rates at $285, $50 higher than in Dubai. RevPAR in the capital was also the highest in the region at $201, while occupancy levelled out at 70.6 per cent in 2009.

In 2009, hotels in the Middle East netted the highest occupancy, room rates and revPAR in the world in 2009 in comparison with the rest of the world.

A worldwide review of hotel data by STR Global shows room occupancy in the region hit 61.3 percent for the year, while the average room rate stood at $202.

“Hoteliers in the Middle East continue to be global leaders, achieving levels of revPAR that other regions could only dream about,” according to Alex Kyriadkidis of consulting firm Deloitte.

The amount of new room supply that entered the Middle East in 2009 intensified drops in occupancy, and put downward pressure on average room rates. “The region now only lags behind Asia Pacific and Europe in terms of the recovery of demand,” he said