Complex Made Simple

Dubai, Kuwait hotel room rates edge down, occupancy varies

Significantly lower food and beverage revenues as well as higher operating expenses led to declines in RevPAR and GOPPAR

Five- and four-star hotels in Dubai continued to report lowers average room rates (ARR) in September, inching down by 2.3 per cent to $207.55 per room, according to a new report.

Occupancy levels remained stable at 76.6 per cent, but were still marginally lower than the ratio recorded in the same period last year, according to HotStats MENA Chain Hotels Market Review.

The report explains that the decline in revenue per available room (RevPAR) was further exacerbated by significantly lower food and beverage revenues, which fell by 19.0 per cent, driving total revenue per available room (TRevPAR) 8.1 per cent lower to $282.55.

Furthermore, higher operating expenses led to lower overall revenues, reducing gross operating profit per available room (GOPPAR) by 8.7 per cent to $84.66.

With regards to Kuwait, the country’s hotels saw occupancy dropping by 8.5 per cent to 42.6 per cent. The report indicates that the sluggish hospitality sector was heavily impacted by weak activity in both public and private sectors as a result of the fall in oil prices.

The fall in demand had negatively impacted all remaining performance indicators with ARR and RevPAR dropping 0.7 per cent and 17.2 per cent respectively. Lower F&B demand compounded the softer room revenue and resulted in GOPPAR reducing 14.6 per cent to $100.02.

($1 = AED3.67, at the time of publishing)