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Hotels in Dubai Post Declining Results

Hotels in Dubai posted declining results in all main metrics in November 2014, which caused decrease in revenues of the region’s hotel industry. Weakened performance made RevPAR (revenue per available room) fall by 6.6% to US$340.06 if compared with the same period of 2013.

Falling occupancy was the main reason for weaker performance. Even though the occupancy lost just 1.1% to 86.7%, it made ADR (average daily rate) fall significantly – the decline in the metric was 5.5% to US$392.37 in total. Total revenue per available room (TRevPAR) lost 2.3% to US$602.70, but that decrease was partially compensated by the growth of revenues from food and beverage sales. Here the increase estimated 4.8%. GOPPAR (gross operating profit per available room) decreased by 4.3% to US$316.36. According to experts, such situation is a result of demand and supply problems that hotels in Dubai start experiencing. Current political and economic conditions in Russia and in some other countries in Eastern Europe were one of major reasons for lowered demand. Declining rouble exchange rate and high hotels rates in Dubai made it hard for many tourists to afford such a trip. Many travellers preferred cheaper options, choosing Sharm El Sheikh and Istanbul instead of Dubai. Consequently, RevPAR of hotels in Sharm El Sheikh grew by fantastic 51.3% to US$29.51, marking comeback of Egyptian hotel market to its normal state.

24.01.2015

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