Declines in tourists from Russia and tougher competition from the likes of Egypt and Lebanon led to a decrease in occupancy and rates at Dubai hotels in March.
According to STR Global’s preliminary March data for Dubai, strong supply growth of 6.9 percent outstripped demand of 4.5 percent during the month.
The data also revealed a 2.2 percent decrease in occupancy to 85.7 percent and a 6.1 percent decrease in average daily rate (ADR) to AED978.69.
STR Global also said that revenue per available room (RevPAR slumped by 8.1 percent to AED838.69 in March).
“Dubai was always going to find it difficult to achieve the same performance levels of 2014, with the first quarter of last year being one of the strongest on record,” said Elizabeth Winkle, managing director of STR Global.
“This factor, combined with a few others, such as new supply entering the market, declines from some of the traditionally strong feeder markets such as Russia and Ukraine, and the progress of competing markets like Egypt and Lebanon, has all combined to create additional challenges for Dubai.
“That said, as always, Dubai showed its resilience as a market and reported one of the highest RevPAR performances globally for the quarter in US dollar terms ($224.08).”
She added: “Supply has been increasing at levels in excess of 6.2 percent for the last 15 months. This new supply is critical for the ongoing success of the city. Additionally, despite the 2.2 percent drop in occupancy, levels continued to exceed 85 percent in March for the sixth consecutive month.”
Last month, figures released by Dubai’s Department of Tourism and Commerce Marketing (DTCM) showed that the emirate’s hospitality sector welcomed 11,629,578 guests in 2014, a 5.6 percent increase on 2013’s total while revenues soared by nearly 10 percent.
Revenues for hoteliers and hotel apartment operators saw significant growth, with total revenues reaching AED23.9 billion ($6.5 billion) for 2014, up 9.8 percent from AED21.8 billion in 2013. Room revenues increased by 12 percent year-on-year and F&B and other revenues increased by 6.1 percent year-on-year.