Hotels in the capital reported a muted performance last month because of Ramadan and an increase in room supply.
The average occupancy rate dropped by 10.2 per cent to 60.9 per cent compared to the same period last year, according to the research company STR Global. The average daily room rate also dropped by 3.7 per cent to Dh389.42.
These pulled down the revenue per available room, a measure of a hotel’s profitability, by 13.5 per cent to Dh237.26.
STR Global attributed the decline to the slow Ramadan season. The number of rooms in the capital increased by 6.6 per cent compared with the same period last year and outstripped the demand during last month.
One of the hotels to open in capital was the 146-room Tryp by Wyndham in March.
The increased room supply in Dubai and Abu Dhabi has put pressure on occupancy and room rates, but both markets are resilient, according to Matthew Green, the head of research and consultancy at CBRE in Dubai.
“Hoteliers, as a result, are getting more creative in terms of offers,” he said. “For instance, they had larger iftars with slightly higher rates to fill the gap in the room rates and occupancies,” he said.
But future drivers of hotel performance in Abu Dhabi and Dubai are strong.
“The Abu Dhabi airport [terminal] is yet to open, and when it does so in 2017 it is going to be a huge factor in achieving the future growth targets,” Mr Green said.
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