Hotel room rates up in Dubai as delegates check in

Strong demand from conference delegates and leisure travellers push up Dubai hotel room rates in May, according to HotStats report.

Dubai hotel room rates rose by 4.6 per cent to an average of US$301.09 in May. Randi Sokoloff / The National

Dubai’s hotels reported rising room rates in May as the city led the region in attracting conference delegates and leisure travellers.

Room rates continued to rise for the month, increasing by 4.6 per cent to an average of US$301.09, resulting in a 3.5 per cent rise in revenue per available room to $247.61, according to HotStats report.

While the report said that the meetings, incentives, conferences and exhibitions (Mice) segment led the growth, it did not provide numbers.

In May Dubai hosted the International Design Exhibition, Beauty World Middle East, Arabian Travel Market and Dubai Airport Show that stretched between three and four days each, and were held at Dubai International Convention and Exhibition Centre. Together they attracted 70,000 attendees, according to HotStats, and pushed up prices at nearby hotels.

The Mice segment contributed the highest average growth, with room rates increasing by 18.4 per cent year-on-year.

The overall occupancy level in Dubai stood at 82.2 per cent, lower than a year earlier by 0.9 percentage points, despite the price rise.

Revenue from food and beverage sales pushed profitability 5.8 per cent higher to an average of $208.15 per room – the highest among the five markets surveyed including Doha, Riyadh and Kuwait City.

“The Mice market is strong on the back of DTCM (Dubai’s Department of Tourism and Commerce Marketing) striving to get a lot of major international and regional conferences to be held in Dubai and the biggest driver is the Dubai World Trade Centre and the exhibition centre,” said Christopher Hewett, a senior consultant with TRI Hospitality Consulting in Dubai that compiles HotStats data.

“The recovery within the region and in certain pockets around the world has also helped increase the number of delegates coming for these events.”

As the tourism markets in Egypt and Lebanon remained weak because of unrest, leisure visitors showed strong demand for Dubai’s four and five-star hotels in May.

An 11.3 per cent increase in room rates within the leisure segment drove average rate growth across the market, according to HotStats.

“But there is also an increase in airlift that the airport has been able to achieve, and as a greater number of people come through the airport generally that results in a greater number of people staying at the hotels for one or two nights,” Mr Hewett said.

While there was an increase in occupancy rates in other Gulf markets, the tourism sector in Cairo is yet to show much improvement.

Hotels in the Egyptian capital reported occupancies of 44.4 per cent and room rates of $111.27, compared to 45 per cent and $107 last year. Fewer guests meant revenue per available room was at $49.40, lower by 4 per cent compared to a year earlier.

High operating costs, such as the 1.7 percentage point rise in payroll costs, meant the gross operating profit per available room was down by 6.1 per cent to $42.55.

“Successful elections will hopefully provide more stability in Cairo and the rest of the country, and will result in greater confidence in regional and international travelers in returning to Egypt,” Mr Hewett said.

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