Dubai hotels see rise in profit while Abu Dhabi continues to struggle

Occupancy in Dubai increased 8.6 percentage points to 64.0% and Average Room Rate (ARR) increased 19.4% to $204.9 for the month. The growth in occupancy and rate resulted in 39.4% growth in Revenue Per Available Room (RevPAR) to $131.12, the report said.

Total Revenue per Available Room (TRevPAR) in Dubai hotels increased 29.2% to $239.10, driving Gross Operating Profit Per Available Room (GOPPAR) up manifold to $39.54. Hotel profitability for August fell back into black this year compared to the same month last year when hotels registered losses due to lower occupancy levels, reduced room rates and elevated costs driven by Ramadan which occurred throughout the entire month.

On the contrary, the Abu Dhabi hotel market, which is largely driven by corporate demand, experienced mixed performance. Hotels in the capital witnessed a 5.8 percentage point increase in occupancy to 56.9% and ARR dropped 9.4% to $95.96, although RevPAR and TRevPAR saw marginal changes only and stood at $54.57 and $134.12 respectively. Nevertheless, GOPPAR for the city saw an increase of 26.1% from last year to $18.18.

"While Dubai thrived and profited from the spike in leisure demand brought forward by Eid-al-Fitr, Abu Dhabi found itself struggling to maintain the rates despite a favourable movement in the occupancy levels. Eid holidays typically attract heavy visitor traffic to Dubai as visitors from the neighbouring GCC countries gravitate towards the city as it offers a wide variety of options for them to spend their long holiday," commented Peter Goddard, Managing Director, TRI Hospitality Consulting Middle East.