Negative profitability for Abu Dhabi hotels
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Dubai and Abu Dhabi hotels saw their profitability and revenue decline during the month of July, according to the latest HotStats survey of full-service hotels by TRI Hospitality Consulting Middle East.
The impact of Ramadan restrictions during the summer heat combined to make a noticeable dent on hotel performance in the UAR.
Abu Dhabi’s Average Room Rates (ARR) fell 4.7% to US $105.82 and triggered negative growth in Revenue Per Available Room (RevPAR) of 3.8%.
Despite this, tourism incentives offered by SummerFest Abu Dhabi helped to relieve the decline in occupancy as the capital’s hotels grew 0.5 percentage points to 50.1%.
Nonetheless, due to high operating costs, Abu Dhabi was the only market surveyed by HotStats to see negative profitability levels which fell from marginal levels last year.
Hotels in Dubai also suffered during the month of July, as illustrated in lower room night demand.
The reduction in RevPAR by 16.8% was induced by occupancy declining 12.5 percentage points to 54.6%, despite ARR rising 2.2% to US$196.87.
Peter Goddard, managing director of TRI Hospitality Consulting Middle East in Dubai said it was “expected” that Dubai’s performance level reached its lowest point of the year “in absolute terms”.
“This naturally resulted from a lack of events, coupled with the fact that this month is traditionally characterised by low demand,” he continued.
“As Ramadan moved earlier into July, occupancies reached the lowest level seen in two years. On the other hand, occupancy levels in Abu Dhabi grew 0.5%, amplified by the success of SummerFest Abu Dhabi which targeted GCC nationals and local residents.”
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