Dubai sees October occupancy dip despite ADR cut

Hotels in Dubai sees occupancy dip, double digit decrease in ADR and RevPAR for the month of October

Supply outdoes demand as hotel occupancy drops 2.5% for the month of October [Image used for representational purposes only]
Supply outdoes demand as hotel occupancy drops 2.5% for the month of October [Image used for representational purposes only]

Hotels in Dubai saw occupancy dip by 2.5% to 80% in October according to STR Global figures.

The Dubai market also reported double-digit decreases in ADR (down 11% to AED871.96) and revenue per available room (RevPAR) (down 13.2% to AED697.20).

It said the shift of Eid al-Adha from October 2014 to September 2015 negatively affected performance, especially at the beginning of the month.

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"ADR in the market has continued to decline in year-over-year comparisons as the market prices more competitively to try to stimulate the traditional levels of high demand," said STR Global in a statement.

The figures also showed that hotels across the UAE experienced a 0.7% decrease in occupancy to 78.5% as well as double-digit decreases in ADR (down 10.3% to AED 753.30) and RevPAR (down 10.9% to AED591.31).

Supply growth (up 5.1%) outpaced demand (up 4.4%) for the month, resulting in the slight dip in occupancy.

STR Global analysts attributed the drop in ADR to a weak Euro. With a decrease in international arrivals from Europe, hotels have lowered rate in an effort to sustain demand.

According to STR Global, Qatar saw a 6.2% decrease in occupancy to 74.1 % in October and a 6.2% decline in RevPAR to QR515.91. ADR in the country remained flat at QAR 695.85.

Supply increased by 5.5% for the month - the highest growth for any month in Qatar since March 2013. With supply growth above 3% for each month since
August, occupancy has decreased by at least 5% in three straight months.

Regionally, hotels in both the Middle East and Africa reported negative results in the three key performance metrics.

Compared to October 2014, the Middle East subcontinent reported a 4.6% decrease in occupancy to 67.4%, a 12.3% drop in ADR to $200.66 and a 16.3% decline in RevPAR to US $135.24.

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