Dubai's hotel sector 'still growing'

25/12/2013 - Dubai Investment News Posted by Bob Brunskill
Dubai's hotel sector 'still growing'

The hospitality sector in Dubai maintained growth in November.

Figures from STR Global show the hotel business in the city continued to improve last month, despite a decline in the wider Middle East and North Africa (MENA) region.

It reports average daily rates (ADR) in Dubai went up by 9.9 per cent to $290.68 (£178), the highest performer across MENA, compared to the same time last year. The revenue per available room (RevPAR) rose 12.7 per cent to $254.18.

Overall, MENA occupancy rates dropped 1.7 per cent to 64.6 per cent but, in contrast, the UAE rose 4.6 per cent to 85.7 per cent.

Global managing director Elizabeth Winkle said it was an example of demand growing faster than supply. In other words, there aren't enough hotels to meet the current needs, so investors should to build new hotels.

Across the wider MENA region, demand was up 3.7 per cent while occupancy was slower at only 2.7 per cent. This difference may prove enough to keep consumer needs unmet, potentially missing out on additional revenue.

According to Gulf News, citing a recent Hot Stats report from TRI Hospitality Consulting, the average room rate for hotels in Dubai improved 9.4 per cent to $396.87 in October. During this month, RevPAR was up 6.8 per cent to $330.80, with the more recent results from STR Global suggesting continued growth and improvement for the thriving sector.

TRI Hospitality Consulting's senior consultant Christopher Hewett said continued success could be expected in December, with strong occupancy, RevPAR and ADR.

He added: "December is a strong month for hotels [in the UAE]. Christmas generates high occupancies."

Typically, this is a period where most of the visitors come from  specific European countries, namely Russia, Germany, France and the UK. This could be for various reasons, but the cold weather faced during this time of the year makes Dubai's warmer atmosphere more desirable.