Market Report Middle East

UAE Hotels See Surge in May Profits Driven by Strong Leisure and MICE Demand

MENA Chain Hotels Market Review – May 2013

HotStats Dubai hotels posted 30.9% growth in GOPPAR, while a 14.7 percentage point surge in occupancy boosted GOPPAR by 31.6% in Abu Dhabi, according to the latest HotStats survey of full service four and five star hotels by TRI Hospitality Consulting Middle East.

UAE hotels see surge in May profits driven by strong leisure and MICE demandDubai’s hotel industry reaped visible benefits from the many international events that took place during the month of May. The International Design Exhibition and Arabian Travel Market collectively drew 40,000 visitors, while events such as Africa Global Business Forum and Dubai Airport Show attracted audience of 10,000 it total, but possessed high economic and commercial relevance nonetheless. Hotel Revenue Per Available Room (RevPAR) in Dubai was boosted by a 6.6 percentage point growth in occupancy to 83.9% and 8.5% growth in Average Room Rates (ARR) to US$282.72. Consequently, Total Revenue Per Available Room (TrevPAR) grew 14.9% to US$439.51, boosting Gross Operating Profit Per Available Room (GOPPAR) up 30.9% to US$192.73. 

Hotels in Abu Dhabi saw continuing decline in ARR which fell 8.3% to US$124.68 in May, however, RevPAR grew 15.1% percent, driven by an impressive 14.7 percentage point surge in occupancy to 72.1%. Supported by the growth in room revenue, TrevPAR increased 12.2%, driving GOPPAR up 31.6% on last year to US$61.37. 

“Both Abu Dhabi and Dubai have demonstrated strong growth in bottom line performance during May. Dubai exhibited particular strength in its key performance indicators, enhanced by the hosting of high-profile international events and growth in leisure demand. In Abu Dhabi, RevPAR levels have seen some improvements over the last few months driven by strong growth in occupancy levels which have now returned to the pre-crash levels, however declining average rates continue to plague the city’s hotels.” commented Peter Goddard, managing director of TRI Hospitality Consulting Middle East. 

In Kuwait, May and June are considered peak seasons for weddings and events, with typically boost revenues for hotels. Although average rates declined 1.7% to US$254.86, the 2.6 percentage point growth in occupancy to 57.2%, helped RevPAR increase 3.1% to US$145.65. However, a substantial growth in dining and banqueting activities from increased wedding demand drove food and beverage revenues and increased TrevPAR 13.5% to US$343.02. Consequently, GOPPAR for May stood at US$150.38, up 8.6% over the previous year. 

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