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Dubai hotel room rates fall 18.7%

Average room rates of Dubai hotels dropped 18.7 per cent to $217 in November 2011 compared to $267 for the same month last year, according to Ernst & Young’s latest figures.

The figures showed that the emirates posted third biggest drops in November in the Mena region after Sharm El Sheikh (22.8 per cent) and Hurghada (22.5 per cent).

The biggest drop in Dubai was recorded in beachfront room rates which dropped over 40 per cent to $247 per night in November 2011 compared to $413 for the same period last year; this was followed by eight per cent, or $10, drop in apartment room rates which fell to $120.

Occupancy rate on beachfront rooms dropped six per cent despite massive room rate fall. Beachfront room rates occupancy fell to 83 per cent during November. Overall occupancy in Dubai inches up just 0.2 per cent during the month.

“Dubai has been successful in attracting a larger share of the GCC tourism market as well as penetrating the US and China markets more effectively as it is considered a stable and open market, boosting overall performance figures. Despite the large increase in the number of available rooms in Dubai in 2011, overall RevPar has not been affected which proves Dubai’s magnetic attraction as a tourist destination,” said Yousef Wahbah, Mena Head of Transaction Real Estate, Ernst & Young.

E&Y’s statistics showed that room rates fell 13.2 per cent and 14.2 per cent in Abu Dhabi and Al Ain, respectively. Room rates in Abu Dhabi were recorded at $270 per night and Al Ain at $187 for each night.

Wahbah said: “An analysis of the year to date and monthly performance numbers for hotels in the MENA region point to a continued realignment in the regional hospitality market caused by three key developments. These are: Changes in the political landscape, increased availability of rooms due to new builds coming on to the market and an overall shift in tourist demography. Due primarily to political instability, Cairo and Bahrain have led the year to date declines in room occupancies with drops of 36 per cent and 29 per cent respectively, negatively affecting hotel RevPar in these markets considerably.

“The year to date decline of 11 per cent in Beirut hotel occupancy can be attributed to multiple factors including political upheaval in neighboring countries and better rates and values in the EU due to the softening of the Euro currency. Despite average room rates in Beirute falling an average of 14.1 per cent, occupancy and tourist arrivals have lagged pointing to the fact that Beirut needs to provide more security to tourists and attract visitors from new and more diverse markets. Dubai is the sole tourist destination in the region that has shown a rise in both occupancy (4 per cent) and RevPar (4.5 per cent) with a very slight decline in room rates (-0.2 per cent year to date).”

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