Room rates hold steady in Abu Dhabi despite international events

November data shows Abu Dhabi improved its occupancy level as it played host to the likes of the Abu Dhabi Grand Prix, Abu Dhabi Film Festival, the Fifa Under-17 World Cup.

Abu Dhabi hotels raised their occupancy rates in November, even as new capacity continued to enter the market.

The capital’s hotels reported an 85 per cent occupancy rate, an increase of 7.8 percentage points from the previous November, according to TRI Hospitality Consulting Middle East.

The month was a busy one for events in Abu Dhabi, among them the annual Formula One race.

At the same time as occupancy rose sharply, the rates that hotels charged was less buoyant.

Average room rates in the capital inched up by 0.8 per cent compared to the previous November to touch US$246.74.

Last month, ever more rooms came on stream.

Through November, 12 properties with almost 2,500 new rooms had opened in the capital in 2013, according to the Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi).

“We believe Abu Dhabi will witness [room] rates levelling off [this year] as the increase in demand allows for a greater balance between supply and demand,” said Christopher Hewett, a senior consultant at TRI Hospitality Consulting.

“We anticipate there are still significant opportunities for additional hotels throughout the city, especially in the mid-market segment and located in areas close to strong demand generators.”

The capital hosted several high-profile events in November, including the Abu Dhabi Grand Prix, Abu Dhabi Film Festival, the Fifa Under-17 World Cup, Abu Dhabi Art and the four-day Abu Dhabi International Petroleum Exhibition and Conference.

In Dubai, a rise in average room rates by 7.1 per cent to $410.17 offset a marginal drop in occupancy levels by 1.5 percentage points to 88 per cent. The revenue per available room as a result rose 5.3 per cent to $362.

During November, 260,810 guests checked into Abu Dhabi properties, marking a 26 per cent rise in the numbers.

For the first 11 months, Abu Dhabi’s 149 hotels and hotel apartments reported having more than 2.53 million guests, a jump of 17 per cent on the same period last year, helping the emirate to achieve its yearly target a month early. Indians, followed by Britons and Germans, led the tourist numbers.

Elsewhere in the region, Kuwait City reported one of the highest room rates at $331.96. That was up from a year earlier, jumping 36.8 per cent. The occupancy rate improved by 3.8 percentage points to touch 62.5 per cent, driving up revenue per available room by 45.7 per cent to $207.44.

The strong average rates there were “due to the unofficial rate agreement in place throughout the city, which prevents rooms being sold below pre-determined rates”, Mr Hewett said. The system has been in place for some time now to avoid rate competition during low season.