Rosy outlook for Dubai’s hotel sector

DUBAI hotels are reaping strong results in the face of a continued increase in room supply and new hotel tax.

According to TRI Hospitality Consulting, average occupancy in Dubai reached 90.8 per cent in 1Q2014, up 3.1 percentage points compared to the previous quarter.

ARR for the period was US$360.50, resulting in a 5.2 per cent rise in RevPAR to US$327.20.

Meeting revenues for 1Q2014 have grown by 23.2 per cent, triggering a 12.3 per cent increase in gross operating profit per available room to US$297.20, the highest in the last three years.

Hotel inventory will continue to soar in the run-up to World Expo in 2020. Neil Jones, chief of sales & marketing, Marriott International, said: “We are committed to add about 10,000 rooms (to the 3,500 rooms in Dubai now) before World Expo 2020.”

Mohammed bin Rashid Al Maktoum, ruler of Dubai, has initiated easier licensing and clearances, tax breaks and eased land conversion charges to encourage growth in the three- and four-star hotel categories.

Meanwhile, a hospitality fee called Tourism Dirham took effect on April 1, charging between seven (US$1.90) and 20 dirhams on hotel stays (TTG Asia e-Daily, March 7, 2014). It is said that the purpose is to raise funds for the marketing of Dubai.

Danijela Ciberlin, business development manager of Traders Hotel, Dubai, said: “Room rates are adaptable as per market dynamics of demand and supply. Dubai’s healthy growth in revenue and occupancy will help it adjust to the extra 15 to 20 dirhams that the guest will be charged in hotels of three-star category and upwards.”

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