UAE hotel occupancy rises to 62% in March, STR says

Hospitality industry is expected to pick up amid a rapid vaccine rollout and signs of recovery in travel demand

Tourists take an Abra ride through Dubai's Madinat Jumeirah resort. Dubai hotels recorded occupancy rates of 60.5 per cent in March, up from 58.2 per cent in February, according to STR. Courtesy: DubaShow more

Hotels in the UAE recorded a surge in occupancy rates during March, extending growth seen in 2020 into the first quarter of this year, as the economy rebounds from the Covid-19 pandemic.

The UAE's hotel occupancy rate rose to 62 per cent in March, up from 59.5 per cent in February, according to hospitality data and analytics specialist STR.

"Although 2020 was a difficult year, the market ended the year with an occupancy above 50 per cent, which was a fine job in moving the occupancy line in the right direction. This trend has continued through the first quarter of the year," Philip Wooller, area director for the Middle East and Africa at STR, said.

In March, each of the three main hotel performance metrics were up from the previous month, the data showed.

Revenue per available room, a key performance measure calculated by multiplying a hotel’s average daily room rate by its occupancy rate, jumped 77.1 per cent to Dh298.7 ($81.30) in March compared to March 2020 when the UAE closed its borders due to the Covid-19 pandemic.

Average daily rates for UAE hotels also rose to Dh481.45 in March, up from Dh436.99 in February and 18.6 per cent higher than rates in March 2020.

In Dubai, hotel occupancy rose to 60.5 per cent in March, up from 58.2 per cent in February and much higher than the 37.5 per cent occupancy rate in March 2020. Revenue per available room was also higher month-on-month at Dh329.84 in March, from Dh275.30 in February, and up 93 per cent off last year’s low base, STR data showed.

"The UAE has proved that [it] is, once again, one of the strongest performance markets in the world; therefore, we expect the region to continue showing occupancy increases as confidence is growing in global vaccine campaigns and a more significant return in travel demand," Mr Wooller said.

The Covid-19 pandemic has hit global aviation and tourism industries hard, as border closures and quarantine requirements hammered travel demand. The UAE – a major tourism, trade and finance hub in the region – recorded a hotel occupancy rate of 51.7 per cent in 2020, a drop of 29.3 per cent from a year ago, according to STR.

Hotels in the UAE were the world's second busiest after China in 2020 due to government efforts to contain the spread of the Covid-19 virus, encourage domestic tourism and enact measures to accelerate the sector's recovery, the Ministry of Economy said earlier this month.

The UAE hospitality and tourism industry's recovery is expected to accelerate in 2021 driven by its Covid-19 vaccine push and easing travel restrictions in some markets, government officials and hoteliers have said.

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