Abu Dhabi hotels cash in on global events
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Abu Dhabi hotels witnessed a 17.1% increase in Revenue per Available Room (RevPAR) driven by a 16.7% point growth in occupancy from 2012, according to HotStats survey of full service four and five star hotels by TRI Hospitality Consulting Middle East.
The Capital benefited for a string of events which helped maintain occupancies close to 80% for the fourth consecutive month, reaching 78.5% in April. However, increasingly competitive nature of the market placed continued pressure on Average Room Rates (ARR) which declined 7.7% to US$144.57. Nonetheless, Total Revenue per Available Room (TRevPAR) grew 13.3% during the month, supported by the strong RevPAR growth. Profitability levels were also robust as Gross Operating Profit per Available Room (GOPPAR) grew 27.8% to US$82.07 elevated by a 3.0% point reduction in payroll costs.
“Competition continues to increase which results in hotels facing pressure on rates as new hotels try to capture market share. Although rates dropped in April, the growth in demand was sufficient enough to see RevPAR levels increase and when combined with lower operational costs, resulted in a 27.8% increase in profits,” said Peter Goddard, managing director, TRI Hospitality Consulting Middle East.
Subsequently, hotels in Dubai maintained comparable, albeit slightly lower performance levels compared to the same period last year. RevPAR fell 1.9% to US$321.75, as a result of a 0.2% point decline in occupancy to 84.3% coupled with a 1.8% fall in ARR to US$381.67. However, year to date performance levels remained strong with RevPAR growing 7.2% to US$325.40, driven by a growth in occupancy and ARR by 2.7 and 4.0% respectively. In terms of profitability, higher payroll costs put pressure on GOPPAR performance, resulting in a 0.4% reduction to US$276.10.
“Although, Dubai was slightly lower in April, the Emirate continues to outperform 2012 with average occupancy reaching 88.2% for the first four months of the year. However as the summer months approach, the market is preparing for historically quieter months, but with the strong performance recorded so far this year, hoteliers are quietly optimistic on a busy summer,” explained Goddard.
