Hotels in Dubai outperformed other markets in the region by a wide margin in January while Abu Dhabi hotels enjoyed double digit growth in occupancy during the month, according to the latest HotStats survey of full-service hotels in six MENA cities by TRI Hospitality Consulting.

Occupancy and average room rates (ARR) for the four and five star chain hotels in Dubai increased by 4.5 percentage points and 9.9% to touch 87.7% and $327.41 respectively as the city hosted the 17th edition of Dubai Shopping Festival during the month. Hotels across the city reported peak occupancy and rates during the month, boosting the citywide RevPAR by 15.8% to $287.25 and gross operating profit per available room by 18% compared to the same period last year.

“The 2011 edition of DSF is estimated to have attracted 3.9 million visitors during the month. The figures for 2012 are yet to come through, but given the growth trend in visitor arrivals, these figures are likely to have grown substantially this year. The DSF has given a solid start to the year and I believe that Dubai hotels will continue to see strong performance levels during 2012”, commented said Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.
In Abu Dhabi, hotels in the capital posted double digit growth in occupancy while the decline in average room rate (ARR) appears to have slowed during January. Abu Dhabi hotels reported a 10.3 percentage point growth in occupancy in January and closed the month with an average occupancy of 74%. However, the ARR for the month dropped to $164.23 compared to $188.01 for the same period in 2011. 

The rate decline in the city appears to have slowed considerably during the month, from 23.5% in December 2011 to 12.6% in January, which was driven by an 11% month-on-month growth in ARR over December.

According to the Abu Dhabi Tourism Authority, hotels in the emirate received 2.1 million guests in 2011 with the growth mainly triggered by a 30% rise in Indian visitors and 15% growth in visitors from China.

“Abu Dhabi has witnessed a strong recovery in occupancy levels in 2011 on the back of increased tourism arrivals to the Emirate as the Arab Spring diverted both regional and international tourists to safer destinations like the UAE,” said Goddard. “However the growing competition in the city, which caused the rates to decline by as much as 19.3% last year alone, is likely to keep the pressure on performance in 2012 as more than 2,500 hotel rooms are expected to open in the city during the year. Our research indicates that the drop in average rates is not confined to five or four star hotel markets, but the rate competition has had a contagious effect across all hotel categories from upscale to budget hotels and hotel apartments.”