Market Report Middle East

Hotels in Abu Dhabi and Dubai Record a Surge in Revenues for January 2014

MENA Chain Hotels Market Review - January 2014

HotStats Hotels in Abu Dhabi posted double digit growth in Revenue Per Available Room (RevPAR) in January on the back of strong growth in occupancy levels and Average Room Rates (ARR), according to the latest HotStats survey of full-service hotels in five MENA cities by TRI Hospitality Consulting.

Abu Dhabi hotels reported a 7.6% growth in ARR to US$165.07 in January, while occupancy climbed 5.4 percentage points to 74.7%. The combined effects of a rise in both performance indicators drove RevPAR growth by an impressive 16.0% and closed the month at US$123.37. The increase in Average Room Rates was primarily driven by the corporate and conferencing segments as a result of demand generated from high profile events such as the Abu Dhabi HSBC Golf Championship and Abu Dhabi Sustainability Week. The growth in the top line, combined with a 2.6 percentage point drop in payroll costs, resulted in a 35.9% surge in profit margins during the month as the Gross Operating Profit Per Available Room (GOPPAR) reached US$86.88. 

“January is typically a robust month of performance for hotels in Abu Dhabi and this year was no exception as continued growth was seen across all key indicators. According to Abu Dhabi Airports Company, Abu Dhabi International Airport received 1,564,266 passengers in January, marking a rise of 14.5 percent from the previous year that corresponded to the continued expansion of Etihad Airways. In addition to benefitting from international passenger growth, Abu Dhabi also hosted a number of high profile events that boosted international visitor numbers. A series of packages were developed for the Abu Dhabi HSBC Golf Championship, as hotels partnered with other travel industry members to cultivate the golf travel segment and strengthen Abu Dhabi’s foothold as an international golf destination” commented Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai. 

Record-high air passenger traffic helped hotels in Dubai maintain robust performance levels during the month of January. Occupancy levels in Dubai reached 86.3% and ARR increased by 10.8% to US$402.15 during the month, boosting RevPAR by 9.5% to US$347.17. Higher average rates were largely attributed to higher yield from the leisure segment, as visitors took advantage of holidays such as the Orthodox Christmas and New Year and the extended New Year break in China. The growth in the top line revenues, coupled with a decline in operating expenses, drove an increase in profits during the month as GOPPAR reached US$302.94, up by 10.4% over the same period in 2013. 

“Hotels in Dubai successfully yielded higher average rates on the back of strong leisure demand during the month of January. The growth in hotel performance also came in the wake of a number of key occasions including the Orthodox Christmas and New Year which attract substantial demand from Russia and the CIS market. In addition, the annual Dubai Shopping Festival occurred throughout the entire month of January and based upon initial estimates saw a 5.0 to 10.0% rise in shoppers, with the GCC and East Asia maintaining their position as the top source markets”, commented Goddard.

Table - MENA Chain Hotels Market Review - January 2014

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