Revenue Decline Hits GCC Hotel Industry

Dubai and Riyadh hotels felt the impact of the slowdown in the GCC hospitality industry as the region’s overall occupancy level remained virtually flat in July, according to data compiled by STR Global. While Dubai reported a 1.3% drop in revenue per available room (RevPAR) to US$105.53 in July, Riyadh ended the month almost flat with a 0.3% decrease to US$113.67, the report said.

Overall, the region witnessed a 0.1% increase in occupancy level last month as average daily rate increased 11.8% to US$145 and RevPAR grew 11.8% to US$88.82. Abu Dhabi recorded the largest occupancy decrease, falling 23% to 51.6% in July. The market also reported the largest decrease in average daily rate (ADR) of 28.1% at US$141.54 as RevPAR fell 44.7% to US$73.10.

Amman, the Jordan’s capital, was the only city to achieve the largest and only double-digit occupancy increase with a 14% rise to 68.3% last month, according to the report. “The good news for the Middle East is that demand showed continued growth against last year, and the sub region still recorded one of the highest ADRs US$162 only beaten by the strong ADR in Southern Africa US$175 due to the FIFA World Cup, which ended mid-July”, said Elizabeth Randall, managing director of STR Global.

“However, the Middle East was the only sub region reporting RevPAR declines in July. It will be interesting to see if the slowing decline will continue during the coming months. Northern and Southern Africa continued on their RevPAR recovery path, and the smooth running of a joyful World Cup will bring additional interest to the region,” said Randall.

The Asia/Pacific region’s occupancy rose 9.6% to 67.3%, average daily rate increased 11.9% to US$124.69 and revenue per available room jumped 22.7% to US$83.94. “July was another good month for Asia/Pacific with an increase of more than 20% RevPAR, resulting from continued strong demand (+13%) with only moderate supply increases (+3%),” said Randall.

“While July was the first month this year with occupancy increases below 10%, which was influenced by the region’s reporting of lower drops in occupancy levels in July 2009, we would expect to see continuance of the current trend. The year-to-date RevPAR, though, is still below year-to-date 2008 results (US$82 compared to US$93),” said Randall.

The Americas region also witnessed a 6.9% rise in July occupancy to 67.9%, ADR went up 1.7% to US$100.93, and RevPAR increased 8.8% to US$68.53. Among the key markets in the region, Buenos Aries, Argentina, reported the largest occupancy increase, jumping 87.3 percent to 62.5%, followed by Santiago, Chile, with a 28.5% increase to 65.6%. - Arab News