Abu Dhabi, UAESunday 23 February 2020

Abu Dhabi hotel market benefits from higher demand and limited supply growth

Occupancy rate in the emirate climbs 2.3% as events such as Pope Francis's visit and the AFC Asian Cup bring in more visitors

A view from one of the rooms at the Rixos hotel at Saadiyat Island. Revenue per available rooms for Abu Dhabi hotels rose 7.2% to an average of Dh321 last year, says consultancy STR. Courtesy Rixos Saadiyat Island 
A view from one of the rooms at the Rixos hotel at Saadiyat Island. Revenue per available rooms for Abu Dhabi hotels rose 7.2% to an average of Dh321 last year, says consultancy STR. Courtesy Rixos Saadiyat Island 

Hoteliers in Abu Dhabi enjoyed a "sensational" year in 2019 as tourism numbers climbed on the back of a series of high-profile events, according to hospitality consultancy STR.

Revenue per available room (RevPar), a standard industry measure to gauge a hotel's performance, increased by 7.2 per cent in Abu Dhabi to Dh321 in 2019, as occupancy levels grew 2.3 per cent to 73.4 per cent. Average daily room rates charged also jumped by 4.8 per cent to Dh437 per room.

“The UAE’s capital had a sensational year for tourism as well as hotel performance,” said Philip Wooller, STR’s area director for the Middle East and Africa.

“The events calendar was busy with a number of high-profile events, lifting citywide hotel demand. On top of the well-established Abu Dhabi F1 Grand Prix in December, the city hosted the 2019 AFC Asian Cup in January, the visit of Pope Francis followed by Idex in February, UFC 242 and IREIS 2019 in September, as well as Adipec 2019 in November," he added.

The growth in hotel rates was also underpinned by the fact that new supply remained limited, with a JLL report issued on Sunday stating supply in the capital remained steady at 30,100 rooms last year.

"Further growth is forecast for the market with demand expected to climb higher than previous levels. Anticipation is high for the completion of Yas Bay, a mixed-use project by Miral, as well as Snow Abu Dhabi on Reem Mall,” Mr Wooller said.

On Thursday, Statistics Centre Abu Dhabi said hotel revenue for the entire emirate increased by 3.5 per cent to Dh1.84 billion in the final quarter of 2019. The occupancy rate for Abu Dhabi reached of 79.6 per cent in the last three months of the year, it added.

Fortunes for hoteliers elsewhere in the region were mixed, though. In Dubai, RevPar dropped 13 per cent to Dh411 as a slew of new properties opened before this year's Expo 2020. Occupancy rates fell by 0.9 per cent to 74.6 per cent despite higher numbers of tourists arriving in the emirate last year.

Some 7,200 new hotel rooms and apartments were added in Dubai last year — 3,200 of which came to the market in the final quarter, according to the JLL report. A further 24,000 rooms are scheduled to be added to the market this year.

Elsewhere in the Middle East, occupancy levels in Beirut dropped by 8.6 per cent over the course of last year. Although RevPar in the first quarter hit its highest level since 2012 at 128,582 Lebanese pounds (Dh313) per night, it more than halved by the fourth quarter to 60,847 as the protests, which began in October, hit the tourism sector hard. Year-on-year RevPar in November and December dropped by 75.7 per cent and 68 per cent, respectively.

In Egypt, however, hoteliers in Sharm El Sheikh benefited from the lifting of a four-year flight ban from the UK in October. Overall occupancy rates grew 10.3 per cent on flat supply to 60 per cent, pushing RevPar up 21.2 per cent to 717.73 Egyptian pounds (Dh167).

Region-wide occupancy rates for the Middle East grew 2.3 per cent to 66.2 per cent.

Updated: February 2, 2020 05:11 PM

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