Dubai and Abu Dhabi Hoteliers Experience Contrasting Results for January 2015

Dubai and Abu Dhabi Hoteliers Experience Contrasting Results for January 2015

ATP-  arab tourism portal- Dubai and Abu Dhabi experienced contrasting results for the month of January as gross operating profit per available room (GOPPAR) fell by 7.4% to US$281.79 in Dubai, whilst Abu Dhabi saw GOPPAR levels increase by 1.2% to US$88.38, according to the latest data from HotStats.

Four and five star hotels in Dubai experienced softening market conditions as average room rates (ARR) fell by 4.6% to US$383.66 whilst occupancy levels increased by a marginal 0.4 percentage points to 86.5%. The reduction in ARR had a profound impact on revenue streams as revenue per available room (RevPAR) declined by 4.2% to US$331.94 and total revenues per available room (TRevPAR) fell by 7.8% to US$522.40. Despite payroll costs declining by 1.2 percentage points for the period, a 19.2% reduction in F&B revenues exerted significant pressure on profitability levels as GOPPAR contracted by 7.4% to US$281.79.

On the other hand, Abu Dhabi hotels recorded an encouraging growth in performance levels as RevPAR increased by 6.1% to US$129.41, led by a 3.8 percentage point rise in occupancy to 78.3% and ARR growing 1.0% to US$165.20. Strengthening conferencing demand benefitted performance levels as TRevPAR and GOPPAR rose by 3.7% and 1.2% respectively.

A robust January for Cairo and Doha

Hoteliers in Cairo and Doha enjoyed exceptional performance levels as RevPAR growth outpaced most MENA markets, surging 88.4% and 24.3%, respectively.

The hotel market in Doha saw RevPAR levels reach a two- year high as occupancy increased by 12.2 percentage points to 82.4% and ARR grew 5.9% to US$225.94. An uptake in corporate and conference demand helped drive double-digit growth in both F&B and conferencing revenues by 22.9% and 39.9%, respectively. The growth in other revenue streams allowed TRevPAR to surge by 23.1%, driving an increase in GOPPAR of 34.2% to US$181.97.

Cairo witnessed a strong revival in leisure and group travel to the city, as occupancy increased by 24.0 percentage points to 59.2%, allowing hoteliers to implement more aggressive yielding strategies, with ARR growing by 11.9% to US$108.99. The uptake in hotel demand transcended to higher F&B demand as TRevPAR increased by 75.3% to US$118.51, allowing GOPPAR levels to more than double to US$59.25 for the period.

The tides have turned for Kuwait hotels

Hotels in Kuwait saw RevPAR decline by 18.5% to US$127.42, as the majority of the market cut rates to maintain market share. ARR fell by 19.7% to US$242.35, while occupancy increased marginally by 0.7 percentage points to 52.6%. A reduction in corporate travel also weighed down other revenue streams as TRevPAR contracted by 18.9%, resulting in GOPPAR levels to decline significantly to US$117.44.

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