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Dubai hotels report lowest occupany rate in 18 years

traffic in dubaiDubai’s hotels had the lowest occupancy in at least 18 years in July, standing more than half empty, as more rooms were created and demand declined, according to research firm STR Global.

Occupancy declined 11.8 percentage points to 45.4 percent from a year earlier, STR Global said in a report. That’s the lowest since the company began tracking the Dubai hospitality market.

Dubai, which built some of the world’s most recognizable hotels such as the sail-shaped Burj al Arab, plans to almost double the number of hotel rooms by 2020 as it expects a surge of visitors ahead of the World Expo that year. The emirate is targeting about 160,000 rooms, many of them in the three- and four-star category rather than the luxury segment, Helal Saeed Almarri, director general of the Dubai Tourism and Commerce Marketing, said in March.

“As July is one of the hottest months within the region and coincides with the fasting month of Ramadan, the city had an overall negative trend, on top of growing supply,” Elizabeth Winkle, managing director of STR Global, said in the report.

Revenue per available room, an industry measure of occupancy and rates, fell 7.4 percent to 290.23 dirhams ($79) according to STR Global, which advises hotel operators, developers and banks on the hospitality industry.

Dubai, one of seven sheikhdoms that make up the United Arab Emirates, attracted 11 million tourists last year, up 11 percent from 2012, helping the economy expand at the fastest pace in six years. The hospitality industry benefited after the Arab Spring, drawing tourists who were avoiding political turmoil in destinations such as Egypt and Syria.-Bloomberg