Dubai: As temperatures rose last month, so did average daily rates (ADR) of hotels in Dubai.
According to data by research firm STR Global, ADR of hotels in Dubai were up five per cent to Dh638.7 in July compared to the same period last year, even as occupancy slumped 12 per cent to 45.4 per cent. As a result, revenue per available room (RevPAR) declined 7.4 per cent to Dh290.23.
“Dubai reported the lowest occupancy levels of any month for the last 18 years, when STR Global began tracking hotel performance for the market”, stated Elizabeth Winkle, managing director of STR Global.
According to Winkle, the drop in occupancy is a result of slow demand in the hot month and rising hotel room supply in the city, which grew 8.3 per cent in July as demand dropped 4.5 per cent.
Thousands of hotel rooms are likely to enter the market this year. The Sheraton Grand Hotel and the Four Seasons Resort Dubai are some of the hotels that are expected to open by the year-end.
Dubai added over 3,400 new hotel rooms, all within four- and five- star hotel segments, over the past year, said Yousef Wahbah, head of transaction real estate for the Middle East and North Africa at global consultancy EY, in an e-mailed statement.
There are 71 hotels being planned or constructed in Dubai, which will add over 22,000 rooms to the market, according to a report by STR Global and Deloitte published in May.
Hoteliers in Dubai said they recorded a higher ADR than occupancy in July.
“Ramadan tends to be quieter compared to most other times of the summer and this impacted us in July this year. While we experienced a dip in occupancy compared to July 2013, we enjoyed an increase of 15 per cent in our average daily rate, which helped greatly in sustaining our revenue targets,” said Enad Tannous, general manager of Amwaj Rotana Jumeirah Beach — Dubai.
