(MENAFN- Khaleej Times) After witnessing the highest performance in 2013 since 2009 revenue per available room for Dubai hotels declined 2.3 per cent in 2014.
More than 21100 hotel rooms are due to enter Dubai’s hospitality market by the end of 2017 as the emirate remain a very promising market for developers underpinned by its steady growth in tourism JLL a leading real estate investment and advisory firm said on Tuesday.
Announcing the release of its 2015 Middle East Hotel Intelligence Reports for the key markets at the Arabian Hotel Investment Conference (AHIC) in Dubai JLL said most of this new supply would belong to the upscale and upper upscale segments yet a trend towards mid-scale properties is emerging.
Chiheb Ben-Mahmoud executive vice-president and head of the hotels and hospitality group in the Middle East and Africa at JLL said investment appetite remained strong for Dubai underpinned by the overall growth in tourism in the city as well as continuous investment in tourism infrastructure.
He said hotel performance in Dubai is expected to remain under pressure in 2015 due to numerous factors such as falling oil prices appreciation of the US dollar and the geo-political situation in the region that will affect demand coupled with continuous additions to supply.
“Growth in demand from key source markets such as Russia and its neighboring countries which experienced an 18 per cent decline in volume during 2014 as well as an emergence of new feeder markets will be instrumental for the Dubai tourism market. The balanced mix of key demand generators in both leisure and business segments will help limit the decrease in performance and absorb the upcoming supply.”
After witnessing the highest performance in 2013 since 2009 RevPAR for Dubai hotels declined 2.3 per cent in 2014. Average rates remained under pressure as the market became more competitive with additional supply and a softening of demand from key source markets JLL said.
At the end of 2014 Dubai had 413 graded hotel establishments with a total of 65000 rooms up 3500 compared to 2013. Supply has grown at five per cent per annum over the last five years. Total room supply is expected to grow 12.5 per cent per annum between 2015 and 2018.
Preliminary 2014 estimates indicate nearly 12 million tourist arrivals in the emirate registering an eight per cent growth over 2013.
“The upward trend reaffirms Dubai’s efforts to achieve its 20 million visitor target for 2020” JLL said.
In 2014 passenger traffic at Dubai International Airport rose 13.5 per cent to 70.5 million. The second half of 2014 witnessed challenges from some of the key source markets due to geo-political situations in these countries and the wider Middle East Region.
JLL said Abu Dhabi remains an attractive market for developers with more than 7200 hotel rooms and serviced apartments due to enter the market in the coming four years -- most being in the four-star or five-star segment.
“The government had limited the issuance of licences for new hotel development due to the excessive supply increase over the last few years in order to allow for smoother absorption of new supply in the future.”
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