Dubai hotel room rates climb 19% in November

Average room rates in the emirate surged to $265.48 in November driven by a convergence of strong leisure, MICE and corporate demand during the month, the consulting firm's survey of six regional cities found.

Occupancy levels also remained strong at 88.8%, giving a boost to the gross operating profit per room, which increased by 11.7% to $201.81 for the month.

Consequently, Dubai led the six cities surveyed in terms of ARR, GOPPAR, and revenue per available room ($235.82) during the month of November and maintained the lead in terms of year-to-date occupancy (81.5%) and TRevPAR ($296.84).

"The continued strong recovery in occupancy, rate and operating profit levels show why Dubai is still one of the prime destinations for hotel operators and investors," said Peter Goddard, managing director, TRI Hospitality Consulting. "While everyone agree that hotels in UAE have benefited from the Arab Spring, industry reports also show that there has been a general improvement in corporate activity in the recent months which we believe has contributed to the overall performance."

In the UAE capital Abu Dhabi, the third edition of the Yas Marina F1 Grand Prix helped occupancy for the month reach the peak at 84.3%, closing 7.6 percentage points above the same period in 2010. However with the exception of occupancy, both monthly and year-to-date performances of Abu Dhabi hotels have remained substantially below the previous year's performance across all metrics, with a notable drop in the average room rate to $212.33.

"The year-to-date tourism statistics from Abu Dhabi Tourism Authority (ADTA) show that the number of hotel guests increased by 16% during the first 11 months of year to an estimated 1,903,888 guests while guest nights rose by 23%. This has helped tremendously in the recovery of demand for Abu Dhabi hotels in the recent months which otherwise had a relatively difficult year, with average rates dropping by 19% compared to the 11-month period in 2010", said Goddard.

Jeddah enjoys peak demand

Jeddah saw hotel occupancy and ARR achieve peak levels during the month of November due to the surge in demand from Hajj pilgrims, the report noted. Hotels in Jeddah, the main gateway to the holy cities of Makkah and Madinah, reported occupancy of 79.1% and ARR of $220.51 for the month, up by 1.1 percentage points and 8.3% respectively over November 2010.

"Hotels in Jeddah benefit strongly from the very high demand during the Hajj season, both in terms of rooms occupancy and food and beverage revenues. More than 2.5 million Muslims, including roughly 1.8 million from outside Saudi Arabia, are estimated to have travelled to Makkah for Hajj this year. And these numbers are likely to rise in the future as large infrastructure projects in Makkah are being completed", commented Goddard.

Sharm El Sheikh sees recovery

In Egypt, Sharm El Sheikh continued to see recovery in occupancy and rates (ARR) to 72.2% and $55.52, although these figures are still trailing last year by 21.3 percentage points and 22% respectively, TRI found. Profits levels (GOPPAR) stood at $31.61, 51.9% below the same period last year.

"Hotels in Sharm El Sheikh have seen recovery in hotel occupancy as confidence slowly returns to the market. ARR levels have also seen a somewhat consistent improvement in the recent months. While in the short term we expect this trend to continue, the prospects of recovery in demand and the future of tourism growth in the long term will be decided by the policy directions taken by the Islamist Parties who won the recent parliamentary elections in some of the tourist-dominated areas such as Red Sea, Luxor and Aswan", added Goddard.