Prices rise with the temperatures, but occupancy dips at Dubai hotels

Dubai hotel room rates in June rose an average 1.4 per cent to Dh658.12 a night. Silvia Razgova / The National

With temperatures rising, Dubai last month had fewer guests check into its ever-increasing number of hotel rooms.

In June, the supply of hotel rooms grew by 8.6 per cent, outstripping the rise in demand, which lagged behind at 2.6 per cent, according to STR Global.

During the month ahead of school summer break and Ramadan, hotels reported a 5.5 per cent decrease in occupancy levels to 75 per cent, compared with the same period last year.

Despite that, hotels continued to increase their room rates, which grew last month at an average of 1.4 per cent to reach Dh658.12 per night. That was the highest since the peak of June 2008, according to STR Global.

If that was meant to offset the fewer number of tourists, it did not have much effect. The revenue per available room declined 4.2 per cent to Dh493.68.

“Occupancy declined in June for the second month in a row, as demand growth slowed during one of the hottest months in the year, and supply growth remained strong,” said Elizabeth Winkle, the managing director of STR Global.

Thousands of hotel rooms are expected to come on to the market this year. A 430-unit Pullman property in Jumeirah Lakes Towers, the 304-room Coral International in Sports City and the 765-room Ghaya Grand Hotel and Apartments next to Sport City and Jumeirah Golf Estates on Emirates Road are among the properties scheduled to open by year’s end.

Laurent Voivenel, the chief executive of the hotel operator Hospitality Management Holdings (HMH), confirmed that rates in his company rose while occupancy slid.

The group’s Dubai properties had “a slow month but held strong in terms of average daily rate reporting a 1.5 per cent increase during the same period last year”, he said.

HMH runs the Coral Dubai Deira Hotel, Coral Dubai Al Barsha Al Khoory Hotel and Apartments, Corp Dubai Al Wasl Al Khoory Hotel, and EWA Dubai Deira Hotel.

In Dubai, 71 hotels are under planning or construction, accounting for 22,000 additional rooms, according to a Deloitte-STR report released in May.

Of these, the upscale segment comprises 16 hotels with 6,200 rooms, and the luxury segment has 14 properties with 4,200 rooms. The mid-market is expected to add 16 new hotels with 4,400 rooms.

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