Dubai hotel room rates set global pace

Hotel room rates in Dubai reported the highest first-quarter average among major destinations globally despite decreases over the last few months.

The average daily rate in Dubai was US$234.88 during the first three months in constant currency figures, above Paris, New York and Singapore which also had rates above $200, according to the research company STR. This was despite rates in Dubai being 10.1 per cent cheaper than the same period last year.

It was the 12th consecutive year that Dubai has led the markets in the first quarter in US dollar constant currency.

“January through March is typically a slower time for other popular markets like New York, London and Paris,” said Philip Wooller, STR’s Middle East and Africa director. “But these are peak months for Dubai, as temperatures are more moderate, drawing in visitors from around the world.”

Events such as the Omega Dubai Desert Classic golf tournament, the Dubai Duty Free Tennis Championship, the Dubai World Cup, the Dubai International Boat Show, Gulfood and the Arab Health Exhibition and Congress also helped to lift the rates while filling the rooms.

Dubai had 82,760 rooms at the end of March, according to STR.

The five-star Atlantis The Palm, which is among the largest number of rooms in Dubai to fill at 1,539 rooms, expects to maintain the occupancy rate this year.

“Room rates are a bit under pressure, but that drives volume,” said Serge Zaalof, the president and managing director of Atlantis The Palm. “You can’t expect growth rates pre-2008 now or ever, because the business here is becoming more mature.”

While the UK, India, China and Russia are among its top source markets, inbound tourism from Iran to the property has also increased over the past year, according to Mr Zaalof.

The average occupancy rate this year at the property is expected to increase marginally to 82 per cent, up from 81.3 per cent last year.

As part of its restructuring efforts, it laid off 30 people this year and 37 last year, Mr Zaalof said.

More rooms in the UAE are in the pipeline, especially in the mid-market segment, as investors show more interest, according to some hotel operators.

“Supply is getting saturated at the top of the market, there’s demand for mid-tier hotels and it fills a gap from the real estate perspective besides being a safer investment,” according to Diane Mayer, a vice president and spokeswoman for the extended stay brands Residence Inn by Marriott and Marriott Executive Apartments at Marriott International.

Marriott International expects to open nine properties accounting for 2,000 rooms in the UAE by 2018.

A Residence Inn by Marriott is expected to open in Al Jaddaf area of Dubai in 2018, and a Marriott Executive Apartment in Abu Dhabi in the third quarter besides another in Al Ain in 2020.

Marriott expects to open five properties this year, including a 298-room Renaissance Downtown Hotel, a 315-room, five-star Marriott Hotel Downtown Abu Dhabi, and a 500-room Lapita Hotel, Autograph Collection, inside the theme parks complex of Dubai Parks and Resorts coming up in Jebel Ali.

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