Dubai hotel occupancy down 5.5% in June

Dubai hotels have slow growth
Dubai hotels have slow growth

Hotel occupancy in Dubai declined in June for the second consecutive month as demand slows down in the summer heat and new supply enters the market.

According to preliminary data by STR Global, hotels posted an occupancy rate of 75%, marking a 5.5% drop compared to the same period last year, while average daily rate (ADR) was marginally up by 1.4% to AED658, and as a result, revenue per available room (RevPAR) dropped 4.2% to AED493.68.

“ADR continued to grow, posting the highest levels of any June since 2008. However, such an increase was not able to fully offset the negative occupancy performance,” said Elizabeth Winkle, managing director of STR Global, in a statement.

Rashid Aboobacker, senior consultant at TRI Hospitality Consulting, expected occupancy to have reached around 80% in June. He estimates that ADR was 10-15% higher compared to the same period in 2013, while RevPAR was 7-10% more.

In May, though, hotel occupancy in the emirate stood at 79.4%, a 3.2% drop from 2013’s 82.5%, according to data from global consulting firm EY. ARR and RevPAR declined to Dh896 and Dh711, respectively.

In the UAE, hotel occupancy touched 75% in May, while ADR and RevPAR reached AED686 and AED516.87, respectively, stated STR Global. According to the consultancy, the Middle East and Africa hotel development pipeline includes 589 hotels, with 137,784 rooms as of May. The UAE and Saudi Arabia make up 70% of the hotel rooms in the region’s pipeline.

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