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KHALEEJ TIMES, Wednesday , Jun 13, 2018 | Ramadan 28, 1439

Dubai hospitality records high occupancy in Q1, tops in Mena

Emirates: Dubai's hospitality sector, which is among world's top performers, recorded the highest occupancy in the Middle East North Africa (Mena) region in first quarter as the city's myriad tourist attractions, theme parks, festivals and conferences drew increased visitor traffic.

Occupancy at Dubai hotels reached 86.9 per cent with an average room rate (ADR) of $293, which led to an overall RevPAR of $255 in first quarter 2018.

Across the UAE, the hospitality market saw a slight increase in occupancy in the first quarter over the same 2017 period, EY Middle East Hotel Benchmark Survey Report said. Occupancy in Dubai increased possibly due to international visitors of the 23rd edition of the Dubai Shopping Festival and favourable weather. 

"Even though there was a slight decline in ADR by 1.2 per cent to $293 in first quarter, Dubai achieved the highest RevPAR in the region at $255 in first quarter of 2018, the same as last year," EY report said.

During the first quarter, the Middle East hospitality market witnessed a steady growth in occupancy. Except for Jeddah, Beirut, and Doha, hotel occupancy across the Mena region saw an increase when compared to the first quarter of 2017. "This increase was primarily due to a number of shopping festivals, improving bilateral relations, and overall pleasant climate conditions across the region," said EY.

Dubai's hospitality sector, which is gearing up to host more than 20 million visitors at World Expo 2020, is way ahead of seven other key global cities in average spend per overnight visitor as well as in the number of hotel keys per resident. Dubai leads in total number of hotel keys per resident at 29.9 per 1,000 people when benchmarked against international hub cities. Paris is the next highest with 17.6 keys per 1,000 people, Knight Frank said a recent Report. Dubai also stands out in terms of average spend per overnight visitor, which is estimated to be over $2,000 in 2017, the highest among global hub cities. The seven other key global cities chosen for benchmarking include New York, London, Paris, Singapore, Hong Kong, Shanghai and Sydney. "Despite facing challenging market conditions, Dubai's hospitality sector remains among the top performers in the Middle East, underpinned by the emirate's positioning as a regional commerce hub and the development of world class demand generators," said Ali Manzoor, associate partner, head of Hospitality at Knight Frank.

According to a recent report by KPMG and International Hospitality Consulting Group, significant tourism development such as IMG World of Adventure, Dubai Parks and Resorts and cultural attractions like The Louvre in Abu Dhabi, are expected to steadily attract leisure travelers for the decade beyond 2020.

Driving the overall hospitality KPIs (key performance indicators) for Dubai were the hotels located on the beach, which saw an increase across occupancy, average room rate and RevPAR. In the first quarter of this year, the occupancy of beachfront hotels in Dubai reached 82.7 per cent with an average room rate of $559, leading to a RevPAR of $462. Meanwhile, hotels in the city of Dubai saw a slight increase in occupancy with 88.7 per cent, but RevPAR fell by 6.2 per cent to $168 in first quarter 2018 due to a 6.8 per cent decline in the average room rate.

The hospitality market in Abu Dhabi also registered an increase in occupancy by 7.3 per cent points, up from 79.3 per cent in first quarter 2017 to 86.6 per cent in first quarter 2018. The increase in occupancy may be attributed to the marketing efforts by Abu Dhabi's Department of Culture and Tourism to engage more visitors from various Asian countries. However, the ADR decreased by 14.7 per cent from $122 in first quarter 2017 to $104 over the same period, leading to a decrease in RevPAR by 6.9 per cent from $97 in first quarter 2017 to $90 in same 2018 period.

Ras Al Khaimah saw an increase in occupancy by 4.5 per cent points from 75.3 per cent in first quarter 2017 to 79.8 per cent in Q1 2018. The hospitality market also witnessed an increase in ADR by 5.4 per cent to $174. 

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