4 and 5-star hotel rates 'soar last month'

01/04/2014 - Popular Articles Posted by Neil King
4 and 5-star hotel rates 'soar last month'

Dubai's four and five-star hotels enjoyed an occupancy rate of around 87.6 per cent in February.

New data from market research firm HotStats found this performance was bolstered by a number of high-profile events which attracted large numbers of international visitors. This helped hoteliers see an 8.7 per cent rise in average room rate (ARR) to $366.99 (£220.51).

Published in Arabian Business, the study also stated the revenue per available room (RevPAR) increased by 7.3 per cent to achieve $321.59. In addition, total revenue per available room (TRevPAR) jumped to $554.93, a surge of 5.8 per cent.

Meanwhile, hotels were able to register an 8.6 per cent rise in gross operating profit per available room (GOPPAR) to reach $282.09. This was attributed to a slight reduction in payroll costs.

Dubai's thriving hotel businesses also had important knock-on effects for the rest of the emirate's economy. The HotStats study found the increase in leisure demand throughout the city contributed to a four and 3.8 per cent rise in food and beverage revenues respectively. 

Peter Goddard, managing director at TRI Hospitality Consulting, stated increased occupancy levels and a rise in average rates helped Dubai achieve gross operating profits which exceeded 50 per cent of the total revenue.

He added: "Strong economic activity within the city, coupled with a consistent rise in visitor numbers has driven demand for Dubai's hotels, especially food and beverage demand with revenues increasing over four per cent from the same period in 2013."

According to the study, hotels in Abu Dhabi had contrasting fortunes, as it saw average rates fall last month. Although occupancy levels did increase by 3.3 per cent to 80.2 per cent, ARR dropped 18.1 per cent down to $162.46. As a result, RevPAR also decreased by 14.6 per cent to $130.36.

The report stated this was mainly due to figures returning to normal, following the capital hosting the biennial IDEX event. This allowed hotels to charge significantly higher room rates.