Dubai's growing hotel supply to result in lowest ADR since August 2004

STR's preliminary July data for Dubai hotels, however, registered a significant growth in demand

Dubai, UAE.
Dubai, UAE.

Average daily rates (ADR) charged by Dubai hotels are set to dip to their lowest levels in nearly 14 years in July, according to analysts STR. However, the preliminary July 2018 data for Dubai hotels shows consistent strong growth for both demand and supply.

The growing pressures, the report noted, could lead to the lowest recorded absolute ADR for any month in Dubai’s hotel market since August 2004.

Based on the daily data from July, Dubai’s year-over-year comparisons from 2017 shows 6.3% growth in supply, a 7.2% hike in demand for hotel rooms, with occupancy rates showing a 0.9% growth to 66% for the month.

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However, even though there was a significant growth in demand in terms of room nights sold, the growing pressures from significant supply has negatively affected average daily rates (ADR) in the city with it plunging by 9.7% to AED 423.63 (US $115.33). The revenue per available room (RevPAR) has also decreased by 8.8% to AED 279.81 ($76.18).

A more detailed STR report on Dubai’s July performance is expected to be released later this month. For more on Middle East hotel performance by STR for Q2, click here.

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