(MENAFN- Khaleej Times) Hospitality markets in Dubai and Abu Dhabi recorded increases in occupancy in February as hotels across the GCC witnessed an even split in increases and declines in key performance indicators, or KPI, a survey shows.
Abu Dhabi's hospitality market posted an increase across all KPI's with RevPAR (revenue per average room) increased by 21.7 per cent when compared to the same month in 2016. "This was mainly due to the increase in ADR (average daily rate) to $163 in February 2017 from $139 in February 2016, coupled by an increase in average occupancy of 3.1 per cent in February 2017," EY analysts said in their Mena Hotel Benchmark Survey Report. Dubai's hospitality market recorded an increase in average occupancy by 4.0 per cent compared to the same time last year. The increase in occupancy maybe ascribed to several events and exhibitions that took place in February.
Yousef Wahbah, Mena head of Transaction Real Estate at EY, said overall, the hospitality market across the GCC witnessed an even split in increases and declines of KPIs in February 2017 when compared to the same month last year.
In the GCC, half of the markets saw an increase in RevPAR, these were the UAE, Kuwait, and Qatar; while the other half, Saudi Arabia, Oman, and Bahrain, saw a slowdown in performance. Among the GCC cities surveyed, the city-based hotels of Dubai saw the highest occupancy at 89.1 per cent, while the beach-based hotels had the highest average room rate at$399. Also in the UAE, Abu Dhabi experienced the highest increase in RevPAR compared to February 2016.
Alpen Capital said in its hospitality report that the GCC's hospitality market is expected to grow at a 7.6 per cent CAGR from an estimated $25.4 billion in 2015 to $36.7 billion in 2020.
The RevPAR in the UAE is anticipated to rise at an annual average of 1.8 per cent to reach $143 by 2020, it said. "Despite a challenging period last year and a weak average rate environment in 2017, the market is likely to recover in the long-term, driven by rise in tourist arrivals stemming from upcoming mega events and government efforts, stated the report released ahead of a key event to be attended by top industry players, including hotel owners, developers and investors, in Abu Dhabi," Alpen Capital said.
Kuwait's hospitality market witnessed an eight per cent increase in occupancy from February 2016 rising from 46.6 per cent to 54.6 per cent in February 2017, causing an increase in RevPAR by 2.8 per cent from $119 in February 2016 to $122 in February 2017.
Doha was able to maintain its RevPAR performance at $138. Although the hotels experienced a drop in ADR from $207 in February 2016 to $189 in February 2017, they succeeded in increasing occupancy by 6.4 per cent compared to the same period last year.
In Saudi Arabia, Riyadh and Jeddah's hospitality markets witnessed a drop in RevPAR by 26 per cent and 24.4 per cent respectively when compared to the same period last year. The drop in Riyadh and Jeddah's hotel performance could be attributed to the decreased number of conferences and exhibitions due to corporate spending cuts in both the public and private sectors.
Muscat's hospitality market witnessed a decrease in RevPAR from $167 in February 2016 to $147 in February 2017, this was mainly due to the drop in ADR by 19.7 per cent when compared to the same time last year.
The report said the Mena hospitality market is expected to continue the trend of a softer performance but has seen improvements in a few cities due to annual exhibitions, events, and festivals that usually occur in the first quarter of the year.-
Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.
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