UAE Hotels faced a slow summer

Dubai: a HotStats survey by TRI Hospitality Consulting Middle East shows hotels in the Middle East and North Africa (Mena) region did not reach high occupancy levels in July 2013, .

Hotels in Dubai and Abu Dhabi registered declining revenues and profits in July.

The summer, alongside restrictions on sales of food and alcohol during Ramadan impacted UAE hotel performance, according to the findings.

In Dubai, occupancy declined 12.5 per cent to 54.6 per cent, which pushed revenue per available room (RevPAR — a benchmark for performance) to fall 16.8 per cent. Average room rates (ARR), however, was up 2.2 per cent to $196.87.

“As expected, Dubai has seen performance reach the lowest point of the year in absolute terms. This naturally resulted from a lack of events, coupled with the fact that this month is traditionally characterised by low demand,” said Peter Goddard, Managing Director of TRI Hospitality Consulting.

As more hotels open in Dubai, supply of rooms may not meet demand, Goddard told Gulf News.

“Overall demand will increase; however, there will be a slight drop in occupancy, the reason being that supply will exceed demand. So I think occupancy [in July next year] will be between 48 and 50 per cent,” he said.

As a result of declining room and food and beverage revenues, total revenue per available room (TrevPAR) in Dubai dropped 10.7 per cent to $242.98 compared to a year ago.

In addition, profitability declined 63.6 per cent to $37.35.

Meanwhile in Abu Dhabi, occupancy grew slightly by 0.5 per cent to 50.1 per cent, as per the survey.

But ARR fell 4.7 per cent to $105.82 , which caused RevPAR to grow 3.8 per cent.

Due to high operating costs, the Abu Dhabi market recorded falling profitability, according to the survey.

In Kuwait, too, hotels registered small growth in occupancy of 0.7 per cent to 42.8 per cent, while RevPAR fell 2.2 per cent to $101.02, as a result of ARR dropping 3.8 per cent to $236.15. Additionally, TrevPAR was up 13.9 per cent to $245.86.

Meanwhile in Jeddah, Saudi Arabia, hotels showed strong performance with occupancy growing by 81.2 per cent, while RevPAR was up 11.6 per cent to $214.75, triggered by a 15.3 per cent growth in rates.

Jeddah hotels recorded the highest profit margins among the markets surveyed, with gross operating profit per available room (GOPPAR) up 21.5 per cent to $174.68.

In the eastern city of Riyadh, meanwhile, hotels recorded a 4.2 per cent drop in occupancy to 43.9 per cent, which saw RevPAR fall 7.9 per cent to $96.06. Profitability was down 10.3 per cent to $53.20.

Similarly in Cairo, occupancy dropped 23.5 per cent to 21.3 per cent, which triggered RevPAR to fall 46 per cent to $25.31.

In Sharm al Shaikh, hotels also saw occupancy levels drop 7.5 per cent to 58.2 per cent., while RevPAR fell 10.4 per cent to $23.4.