Market Report Middle East

Abu Dhabi Witnesses Strong Hotel Performance Due to High-profile Events

MENA Chain Hotels Market Review - October 2013

HotStats Hotels in Abu Dhabi registered substantial growth in revenues and profits during the month of October 2013, according to the latest HotStats survey by TRI Hospitality Consulting Middle East.

Abu Dhabi hotels witnessed a boost to key performance metrics in the wake of the Eid Al Adha holidays and the city hosting a number of internationally renowned events. Occupancy levels in Abu Dhabi went up by 8.4 percentage points to 79.6% and Average Room Rate (ARR) increased by 16.8% to US$182.37 during the month, boosting Revenue Per Available Room (RevPAR) by 30.6% to US$145.13. The growth in the top line performance caused a surge in profit levels during the month as the Gross Operating Profit Per Available Room (GOPPAR) reached US$117.43, up by 47.3% compared to the same period in 2012.

As Dubai entered its high season, overall performance levels increased from the previous year, despite a 2.0 percentage points decline in occupancy at 83.4 percent. However this month occupancy still exceeded the level witnessed year to date by 3.5 percentage points. ARR increased by 9.4% to an astounding US$396.87 driving RevPAR up 6.8% to US$330.80 and when coupled with higher operating profits boosted GOPPAR 7.6% to US$280.70, the highest out of the five MENA markets surveyed by HotStats this month.

“The growth in Abu Dhabi’s top line performance was attributed to the city hosting a number of high profile international events, including the Abu Dhabi Film Festival and the FIFA U-17 World Cup which attracted nearly 80,000 visitors during the first two weeks of the competition. Furthermore, corporate and MICE activities resumed as the capital hosted several international medical conferences. Leisure tourism was propelled in the wake of Eid Al Adha holiday, as the city provided a variety of family-friendly shopping and entertainment options. Similarly, Dubai was able to capitalise on demand through an increase in average rates which jumped 9.4%. The holidays helped Dubai attract strong demand from visitors within the region and Saudi Arabia in particular, while MICE activity returned to the market as the city hosted several events including Cityscape Global” commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.

In October, four and five star hotels in Doha recorded occupancy growth that was driven by a rise in corporate and leisure demand. Occupancies increased marginally to 68.7%, up 1.1 percentage points while Average Room Rate (ARR) dropped 6.5% to US$237.06, leaving the RevPAR for the month 5.0% lower at US$162.95. The 4.2% decline in Total Revenue Per Available Room (TrevPAR) was attributed to lower food and beverage consumption, coupled with a substantial decline in conferencing revenues. Higher operating costs coupled with a rise in payroll expenses drove profitability 10.5% lower than the previous year to US$197.41.

“Occupancies in October reached 68.7% and exceeded levels seen year to date due to the influx of demand through corporate events and the Eid Al Adha holidays which attracted over 65,000 tourists from the Gulf countries. Although occupancies in Doha increased marginally due to the events, average rates remained under pressure from high levels of competition and subdued profitability which incurred negative growth from the previous year” stated Peter Goddard.

Table - MENA Chain Hotels Market Review – October 2013
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