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Dubai hotel occupancy rises in November but rates continue to slump

Hotel occupancy in Dubai rose by nearly five percent in November compared to the year-earlier period to be the top performing market in the Middle East and North Africa, according to new figures.

EY’s November 2016 GCC Key Performance Highlights report showed that the emirate’s hotels achieved an occupancy rate of 89.5 percent compared to 84.8 percent in November 2015.

The data also showed that Dubai hoteliers saw the highest revenue per available room (RevPAR) of $250 during the month.

Yousef Wahbah, MENA head of transaction real estate at EY attributed the improvement in performance to the Big 5 exhibition, the largest construction exhibition in the Middle East which took place in Dubai last month.

However, he added that despite having the highest occupancy and RevPAR in MENA in November, Dubai hoteliers saw their average daily rate (ADR) drop by 8.6 percent resulting in a decline in RevPAR of 3.6 percent.

The EY report also showed that Abu Dhabi maintained stable occupancy in November mainly due to the Formula 1 event allowing hotels to keep their occupancy afloat with no change to last year’s 84 percent.

However ADR in the UAE capital decreased by 16.2 percent year-on-year, as did RevPAR.

Ras Al Khaimah witnessed a steady performance in hotel performance with November occupancy dropping by 1.6 percent compared to November 2015 while a 2.6 percent increase in ADR resulted in a modest increase of 0.5 percent in RevPAR.

Elsewhere, Doha witnessed a positive increase in occupancy when compared to November 2015, rising by 4 percent but RevPAR dropped by 6.9 percent.

Saudi Arabia’s hospitality market saw occupancy and ADR of some of its largest cities (Riyadh and Jeddah) decline in November, resulting in a negative RevPAR performance across all cities.

Oman was able to maintain the same occupancy levels of 76 percent compared to November 2015, but ADR declined by 16.5 percent, leading to a slump in RevPAR of 16.5 percent.

Kuwait experienced a 3.1 percent increase in ADR but the drop in occupancy from 57 percent in November 2015 to 50 percent last month resulted in a RevPAR decline of 8.2 percent.

Wahbah said that while hotel performance has been weak across the region due to slower economic growth, performance is expected to improve in December in certain markets, as the holiday season attracts more tourists.

He added that it is anticipated that the hospitality market across the GCC will continue to face downward pressure on occupancy and ADR during most of 2017.

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