Dubai's hotel room supply increase affects performance

Dubai also witnessed an increase in demand, with occupancy above 90% for the first three nights of 2019

Research, Data

Dubai saw a 9.3% increase in supply in January 2019 while demand also rose by 3.9%, when compared to the same period in 2018.

STR has released its preliminary January 2019 data for Dubai, which indicates performance has been affected by a continued influx of new room inventory.  

Based on daily data from January, Dubai reported increases in both supply and demand (9.3% and 3.9%) in year-over-year comparisons.

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In January 2019, occupancy dropped 4.9% to 82.2% compared to the same period last year. Similarly, average daily rate (ADR) fell 11.4% to AED 714.01 (US$194) and revenue per available room (RevPAR) dropped by 15.8% to AED 586.79 ($160).

A number of new hotels have opened in the last month, including the likes of W Dubai - The Palm and Stella di Mare.

Analysts at STR noted that "year-over-year declines are to be expected with significant supply growth ahead of Expo 2020". Regardless, demand (i.e. room nights sold) grew for the fourth consecutive month, and occupancy was more than 90% for each of the first three nights of the year, reported STR.

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