Abu Dhabi — Hotels in Abu Dhabi were able to capitalise on higher demand levels in February as Average Room Rates (ARR) increase by 27.1 per cent to reach $206 (Dh756), according to the latest report by HotStats.

Meanwhile, occupancy levels grew 3.4 per cent to reach 84 per cent. The increase in room rates helped revenue per available room to grow 32.5 per cent, the report said.

Stronger revenues in the food and beverage segment along with increased rates drove growth in bottom-line performance as gross operating profit per available room went up 44 per cent to $132.9.

“This is the highest that average rates have been in quite a few months, and that’s a good sign because it shows you that the market is returning and growing. The average rates bottomed out in November last year, and then they continued to increase month on month.

We expect them to continue to increase for the next six months or so,” said Christopher Hewett, senior consultant at TRI Hospitality Consulting.

He attributed the rise in demand to Etihad Airways’ expansion in connecting new cities to the capital, and increased efforts by the Tourism and Culture Authority to promote the emirate to international markets.

Hewett said the supply/demand equation was balanced.

“The market is expecting 3,000 new keys this year, but I don’t think that will have much of an impact on the market because the supply/demand balance is more focused on having stronger demand, and I think hotels will be able to absorb the new supply,” he said.

Across the UAE borders, four and five star hotels in Riyadh witnessed an increase in performance levels in February compared to the same period last year, according to HotStats.

A simultaneous increase in occupancy of 6.3 per cent to 76.9 per cent, and in ARR of 2.1 per cent to $252, resulted in a double-digit growth of 11 per cent in revenue per available room.

However the increase in total revenue per available room was partially weighed down by marginal F&B revenues.

In Egypt’s coastal Sharm Al Shaikh, hotels reported an increase in ARR by 13 per cent to $37.5, but occupancy dipped nine per cent to 50.7 per cent.