UAE tourism industry remains strong
Despite regional challenges, the tourism industry in the UAE over the past year has remained strong and prosperous. According to forecasts, Dubai will remain stable with ongoing growth and Abu Dhabi is likely to remain under pressure with continued growth in hotel supply.
"While some traditionally popular destinations, such as Lebanon, Egypt, Syria, etc. have been affected by security concerns and travel advisories, other destinations, including Dubai, have proven resilient and even thrived in the recent months, partially benefitting from the crisis," said Christopher Hewett, Consultant with TRI Hospitality Consulting in Dubai. According to TRI Hospitality Consulting's figures, Dubai's hotels gross operating profit per available room (GOPPAR) increased 14.1 per cent to $160.07 for the January to September period.
"Dubai's hospitality market have shown signs of prosperity again, assisted by its image as the regional safe haven, but mainly powered by its large variety of leisure and entertainment options, number of key regional and international conferences, and growing business demand, all of which helped improve occupancy levels, room rates, and profits throughout 2012," Hewett said.
Abu Dhabi, which has witnessed an increase in the number of rooms with new hotel supply, and which relies mostly on corporate demand have struggled through a year of diminished business demand, registering a GOPPAR of $70.41 for the January to September period, a 19.1 per cent drop from the same period in 2011, he explained.
According to TRI's latest data, to date Abu Dhabi's average occupancy has increased 1.5 per cent to 66.3 per cent. In spite of a positive change in occupancy levels, Abu Dhabi's hotels have underperformed as the increase in occupancy did not make up for the 14.7 per cent drop in Average Room Rate (ARR), resulting in a 12.7 per cent drop in revenue per available room (RevPAR).
Average room rate for the first nine months this year stands at $274.2, up 8 per cent from last year, whereas Abu Dhabi's ARR dropped 14.7 per cent to $136.5.