(MENAFN - Khaleej Times) Major markets across the GCC continued marked improvement in revenue per available room, or RevPAR, during the first quarter of 2012 as demand picks up, according to STR Global.
The leading provider of market data to the hotel industry said Jeddah and Al Khobar in Saudi Arabia and Dubai attracted more visitors, which helped RevPAR to sustain an upward trend in first quarter. Despite increases in demand across all but one market, continued supply growth limited RevPAR performances in the other major GCC markets.
"The majority of markets across the GCC have weathered the recent storms fairly well," Elizabeth Randall, managing director of STR Global, said in an e-mailed statement to Khaleej Times.
STR Global provides a single source of global hotel data covering daily and monthly performance data, forecasts, annual profitability, pipelines and census information. It tracks more than 93,200 rooms across the GCC region and reports on all major cities including Makkah and Medina.
"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. Dubai and Abu Dhabi are interesting case studies to show how hotel markets can cope with balancing demand and supply," Randall said.
According to STR Global, Dubai and Abu Dhabi represent two different cycle stages, particularly when looking at supply growth over the last 15 months. In the first quarter of 2012, both cities benefited from a fairly similar demand growth, with Dubai growing by 11 per cent and Abu Dhabi by 9.7 per cent. However, considering the supply growth since 2011, the impact on RevPAR performance has been quite different.
"We are positive about the prospects for the hospitality industry within UAE and the wider GCC market, thanks to growing business, Mice, leisure and religious tourism sectors. The entire tourism industry, including aviation, travel trade, F&B, Mice, etc, is developing at a steady rate and this will help us catch up to mature markets of Europe and US and stay on par with emerging markets in Asia," Hilton Worldwide Middle East Africa president Rudi Jagersbacher told Khaleej Times.
In Abu Dhabi since December 2011, the city has seen double-digit supply growth, reaching 16.7 per cent in first quarter of 2012. The additional room inventory resulted in declining occupancy by six per cent to 64.1 per cent. Abu Dhabi's average daily rate, or ADR, during the first quarter of the year was Dh633.85, 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 first quarter, resulting in an 8.2 per cent occupancy increase to 86.6 per cent. During the same period, ADR increased 8.7 per cent to Dh964.86, benefiting RevPAR growth of 17.6 per cent.
Excluding Makkah and Madinah, Jeddah is the star performer in RevPAR growth for the first quarter in the GCC market. The city benefited from demand growth (17.3 per cent) and a temporary reduction of available rooms as the Westin Jeddah is closed for refurbishment between October 2011 and summer 2012.
Al Khobar saw RevPAR in first quarter of 2012 increase to SR414.16 (18 per cent), led by occupancy reaching 57.3 per cent (13.4 per cent) compared to the previous year. Occupancy growth primarily was driven by increased demand (21.2 per cent) amid fairly low increases in new supply (6.9 per cent), which in previous years increased by double digits. Elsewhere in Saudi Arabia, Riyadh's supply growth (11.5 per cent) in first quarter of 2012 outpaced demand (3.1 per cent). This resulted in an occupancy decline of 7.5 per cent to 63.2 per cent.
