Dubai: Hotels in Dubai expect occupancy rates for the second half of the year to be flat compared to the same period in 2013, due to rising hotel room supply in the market, while room rates are likely to rise.
There are 88,680 rooms in the emirate as of the first half of this year, according to Issam Kazim, chief executive officer of the Dubai Corporation for Tourism and Commerce Marketing (DCTCM).
“We started 2014 with 81,492 rooms and between January and June this was increased by an additional 31 hotel establishments and 7,188 rooms bringing the total number of rooms to 88,680,” he told Gulf News in an emailed statement, adding that there is a “healthy pipeline” of hotels being developed until the end of the year.
Jumeirah Group, for instance, expects its Dubai hotels’ occupancy rates to be at a similar levels in the second half of the year compared to the corresponding period in 2013, while their average room rate is likely to grow by 2.5 per cent.
Meanwhile, Mövenpick Hotels and Resorts expects its Dubai hotels to witness a marginal increase of 0.5 per cent, to 78 per cent, from July to December, compared to the same period a year ago, while average room rates (ARR) are likely to be 14 per cent higher, said Toufic Tamim, the company’s vice president of sales and marketing for the region.
Similarly, occupancy and average room rates of Accor’s hotels in Dubai are likely to be “slightly up” between July and December compared to the same time a year ago, said Christophe Landais, managing director of the French hotel operator in the Middle East.
Slow demand
The strong demand for hotels rooms in Dubai has allowed hoteliers to yield higher rooms rates compared to previous years, which has helped drive their revenue per available room (RevPAR — an industry benchmark for performance).
In July, which has traditionally seen slow demand due to the weather and its coincidence with Ramadan, Dubai’s hotel occupancy stood at 45.4 per cent, down 12 per cent compared to the same period in 2013, according to global research firm, STR Global.
On the other hand, average daily rate (ADR) rose five per cent year-on-year to Dh638.7. As a result, revenue per available room declined 7.4 per cent to Dh290.23, as per STR Global’s estimates. Supply in the emirate grew 8.3 per cent during the month as demand dropped 4.5 per cent, STR Global data showed.
Meanwhile, Dubai’s hotel occupancy from January to July has been lower compared to the same period in 2013, said Rashid Aboobacker, senior consultant at TRI Consulting, which focuses on the hospitality sector. It stood at 79.4 per cent, which was slightly lower than the 80.6 per cent that was posted during the corresponding period a year ago, he said.
Average room rates had grown from $323.60 to $342.20 (Dh1,187.61 to Dh1,255.87) between January and July compared to the corresponding time a year ago, he added.
Aboobacker estimates Dubai’s hotel occupancy to be lower this year compared to 2013, and average room rates to be marginally higher.