Dubai Gets 12,000 New Hotel Rooms

Approximately 12,000 new hotel rooms will be added to Dubai in the next three years, according to STR Global, a provider of market data to the hotel industry.

Around 79 per cent of the new supply will comprise five star properties, 14 per cent will be four star hotels and seven per cent will comprise three star properties, said STR Global.

During the first quarter of 2012, the major markets across the GCC reported mixed results in revenue per available room (RevPAR) following mostly positive performance for year end 2011, said the firm.

Saudi Arabia and Dubai experienced continued RevPAR improvements during the first quarter of 2012.

“The majority of markets across the GCC have weathered the recent storms fairly well”, said Elizabeth Randall, managing director of STR Global. “We have seen demand growth for most markets in the region, highlighting the stronger underlying fundaments of stability and attractiveness to regional and international visitors. Increasing room inventory has been a dominant factor influencing performance in the past and will continue to do so as the region remains attractive for hotel owners and operators.”

In the UAE, Dubai and Abu Dhabi represent two different cycle stages when looking at supply growth over the last 15 months.

In Q1 2012, both cities benefited from a fairly similar demand growth, with Dubai growing by 11.0 per cent and Abu Dhabi by 9.7 per cent.

However, the impact on RevPAR performance was notable. In Abu Dhabi since December 2011, the city has seen double-digit supply growth, reaching 16.7 per cent in Q1 2012. The additional room inventory resulted in declining occupancy by six per cent to 64.1 per cent. Abu Dhabi’s average daily rate (ADR) during the first quarter of the year was Dhs633.85, a decrease of 11.7 per cent compared to the previous year.

In Dubai, new supply growth was less pronounced at 2.6 per cent in Q1, resulting in an 8.2 per cent occupancy increase to 86.6 per cent. During the same period, Dubai’s ADR increased 8.7 per cent to Dhs964.86, boosting RevPAR by 17.6 per cent.

STR Global tracks more than 93,200 rooms across the GCC region.