Doha and Dubai wrestle with hotel revenue slump

Doha and Dubai operators will be pinning their hopes on brisk Q4 business after recording year-to-date RevPar slumps of 19.9 per cent and 11.2 per cent respectively.

The figures, unveiled by STR Global during the Serviced Apartments Summit MEA held at Fairmont The Palm on Monday, confirm the ongoing slowdown in the hospitality industry.

RevPar in Dubai’s serviced apartments sector dropped 11.9 per cent – coupled with a 12.9 per cent fall in average daily rates to Dhs521 – although occupancies rose marginally by 1.3 per cent.

To August, year-to-date RevPars regionally are down 9.6 per cent to $113.60. “Doha is very tough at the moment,” said Philip Wooller, area director MEA for STR Global.

Qatar’s one consolation is long-term apartment business is holding up while “almost disappearing” in other Middle East markets, said Filippo Sona, Director, head of hotels MENA, for Colliers International, as more operators face pressure to fill rooms.

Falling oil prices, rising supply and fragile consumer confidence are all impacting the MENA region, while Ali Manzoor, associate partner, Knight Frank, also highlighted the inexorable rise of airbnb.

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“Those which are severely impacted are the more affordable hotels, leisure-oriented hotels, properties with fewer facilities and unbranded hotels,” he said, adding that Downtown, JBR/Dubai Marina and Palm Jumeirah are the most sought-after districts in Dubai.

But DTCM’s regulation of the market means it can control volume and growth.

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“It will allow holiday home supply to increase until 2020, and swell in tandem with Expo, and then I suspect it will stop approvals and start revoking licenses,” said Manzoor.

Globally more operators are working with, rather than against, airbnb, and Zoltan Kali, head of asset management for Omran in Oman, said: “We are going to try airbnb with some of our hotels.”

Sona said hotels-and-serviced-apartments combos have seen higher GOP than stand-alone premises and there were still “clear advantages” for branded operators regionally as the serviced apartments pipeline remains significantly less than for hotel rooms.

“There’s a market shift towards smaller units and there will be a rate comprehension,” he said. “A lot of bathrooms in serviced apartments are incredibly large and there may be scope to revise designs to market demand.”