Editor| Key Take Aways...
1. The emirate plans to double its room stock by 2012, to over 26,000 rooms from its current stock of 12,000
2. The STR Global report ranks Dubai first in terms of average revenues per room followed by Paris, New York, London and Rome.
Guess where your NEXT MOVE should be....
Source
Average daily rate (ADR) and revenue per available room (RevPAR) may see decreases in the next couple of months due to the financial turmoil, according to advisory firm Deloitte Middle East.
The RevPAR for Gulf hotels, as reported by Smith Travel Research Global (STR Global) and analysed by Deloitte, has shown strong increases in 2008 when compared to 2007 (year to September 2008).
Among the Gulf countries, Abu Dhabi reported a 39.9 per cent change in RevPAR in the first nine months of the year, followed by Oman with 32.90 per cent and Saudi Arabia with 23.10 per cent while Dubai grew 4.7 per cent.
"A key driver is Abu Dhabi's increase in its occupancy by 10.2 per cent in 2008 when compared to 2007.
"The emirate plans to double its room stock by 2012, to over 26,000 rooms from its current stock of 12,000.
"This is testimony to the fact that the emirate is committed to attaining its long-term tourism targets as announced," Robert O'Hanlon, Tourism, Hospitality and Leisure Partner for Deloitte Middle East, said.
Quoting an Abu Dhabi Tourism Authority report, he said the emirate has set a target of 1.68 million hotel guest arrivals for 2008, an increase of almost 15.87 per cent compared to 1.45 million in 2007.
Robert said occupancy rates in Abu Dhabi soared to 81.3 per cent in 2008 compared to 73.7 per cent in 2007, while Dubai's occupancy rates fell to 81.2 per cent in 2008 compared to 83.8 per cent in 2007.
Abu Dhabi's RevPAR soared almost 40 per cent to $215 compared to $154 in 2007 while Dubai's Rev-PAR rose slightly by 4.7 per cent to $229.
Among Gulf states, Dubai recorded the highest RevPAR at $229, followed by Abu Dhabi at $215, Riyadh at $196 and Qatar at $183.
The STR Global report ranks Dubai first in terms of average revenues per room followed by Paris, New York, London and Rome.
"One reason why Rev-PAR is taking a hit in Dubai and not in other areas of the Gulf is the large increase in supply. The percentage change in RevPAR from September 2007 stood at -28.9 per cent. For the past year, supply has grown rapidly in Dubai, with September 2008 seeing a 17.7 per cent increase. Conversely, supply in other areas of the Gulf is growing at a much slower rate," he said.
"I think corporate travel, especially domestic, will hold up well. I expect to see a significant drop in leisure travel to the region from Europe and that will impact the 'leisure' destinations like Dubai more than other more commercial cities, like Abu Dhabi," Director of Marketing, STR Global, said.
He said occupancies will come under pressure.
The STR Global report said it is important to maintain pricing integrity during a recession. If hotels drop their rates to compensate, it will be extremely difficult and may take years to bring ADR back up as travellers will not be as willing to pay higher rates.
The recovery cycle will be much quicker if room rates continue to see slight growth.
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