Dubai hotels suffer third year of falling profits
Dubai hotels saw their revenue per available room fall 13.5% last month due to a decline in both occupancy and rates.
Room occupancy in September was down 4.2% year on year, while the achieved average room rate fell almost 9% to $162.50.
According to data from Hotstats, the fall was prompted by the addition of 4,000 hotel rooms in the third quarter of the year, including the 414-room Rixos JBR and the 238-room DoubleTree by Hilton Business Bay.
The total number of rooms has risen to 82,200 as Dubai gears up for Expo 2020.
In addition to the drop in room revenue, hotels in Dubai suffered declines in food and beverage (-4.4%) and leisure (-17.9%) revenue on a per available room basis.
As a result, Dubai hotels are on course for a third consecutive year of profit decline, following a 20.5% drop in 2015 and a 10% fall in 2016.
"The additions to stock in the Dubai hotel market, many of which are in the mid-market segment, are inevitably diluting top line performance which is having a knock-on effect on the rest of the profit and loss," said Pablo Alonso, CEO of HotStats.
"Despite this, construction projects in the city are continuing unabated and a further 4,100 bedrooms are due to enter the market in the final quarter of 2017, with up to 40,600 rooms being developed in the next two and a half years in the lead up to Expo 2020."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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