UAE hotel rates down in August as supply outpaces demand

UAE hotels saw rate declines in August as demand failed to match new supply entering the market, according to research firm STR.

The company said occupancy rates across the Middle East were down 3.9 per cent compared to August 2016, to 62.1 per cent, but revenue per available room (RevPAR) increased 3.2 per cent to $93.84.

In the UAE, hotel occupancy rates decreased 5.9 per cent compared to the previous year to 68.4 per cent, as a 4.8 per cent increase in year to date demand fell short of a 5.1 per cent increase in supply.

This also pressured pricing, with RevPAR down 14 per cent in Dubai and 11.9 per cent in Abu Dhabi primarily due to lower rates.

Elsewhere in the Middle East and Africa, Egypt saw substantial increases in average daily rate (ADR) and RevPAR in its local currency.

Occupancy in the country was up 12.5 per cent year on year, while ADR was up 73.3 per cent to EGP1,233.18 and RevPAR increased 95 per cent to EGP823.70.

However, in US dollar terms the ADR was down 12.9 per cent following the government’s decision to unpeg the Egyptian pound last November.

Hotel rates across many Middle Eastern markets have continued to fall in recent years due to the impact of lower oil prices and new hotel supply.

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