- ‘Demand continues to grow, but an influx of new inventory is pressuring occupancy and ADR levels’
- New Year’s Eve is one of the busiest for Dubai hotels, and rooms are usually sold out
DUBAI: The entry of new keys in Dubai’s hotel market pressured occupancy and room rates in December, preliminary data from industry monitor STR show.
“The story remains the same for Dubai. Demand (room nights sold) continues to grow, but an influx of new inventory is pressuring occupancy and ADR levels,” the London-based group said.
For the month, average occupancy rate in Dubai hotels dipped 2.7 percent to 79.2 percent while average daily rate (ADR) went down 4.3 percent to 758.80 dirhams.
Revenue per available room (RevPAR) in December was 6.9 percent lower to 600.98 dirhams as hotel room supply rose faster at 8.6 percent compared with the demand at 5.6 percent.
ADR and RevPAR are the hotel industry’s performance metrics, with the first one derived by dividing room revenue by rooms sold and the second calculated by multiplying a hotel’s ADR by its occupancy rate.
JLL Mena in an earlier report said that a further 1,400 rooms were added to the market in the third quarter of 2018, bringing the total stock of quality hotel rooms in Dubai to almost 88,100 keys.
Among those the opened their doors to guests were Hampton by Hilton in Qusais with 420 keys; Garden Inn in Jaddaf with 336 keys and Grand Millennium Business Bay with 251 keys.
“When looking at individual days during the month, New Year’s Eve was the strongest with occupancy reaching 97.1 percent and ADR at 1,703.15 dirhams,” STR said.
New Year’s Eve is one of the busiest for Dubai hotels, and rooms are usually sold out despite higher posted rates as hoteliers take advantage of the increased demand.
The market closed the month with five consecutive nights of occupancy above 90 percent, it added, most probably due to the return of the fireworks display at Burj Khalifa as part of New Year festivities that attract throngs of local tourists and international visitors.
Emaar, the developer of the world’s tallest building, earlier opted for a light and laser show to celebrate the 2018 New Year’s celebrations.