Season-ending Formula One race pushes up hotel room rates in Abu Dhabi

During the three-day event that ended November 27, hotels reported that the average room rate across the city increased year-on-year by 101.5 per cent and 143.7 per cent on November 24 and 25 respectively.

A Ferrari is being driven during the second practice session of the Formula 1 Etihad Airways Abu Dhabi Grand Prix at Yas Marina circuit on November 27. Andrej Isakovic / AFP

The Formula One Etihad Airways Abu Dhabi Grand Prix helped push up room rates in the capital despite a slow month, as supply continued to grow but at a slower pace.

During the three-day event that ended on November 27, hotels reported that the average room rate across the city increased year-on-year by 101.5 per cent and 143.7 per cent on November 24 and 25, respectively, according to data research company STR Global. From November 24, the average room rate was above Dh1,000 for four consecutive days.

The absolute average room rate was the highest in Abu Dhabi since November last year, it said.

Some of the hotels on Yas Island also reported a full house, similar to last year.

The four-star Radisson Blu Hotel Yas Island and the three-star Park Inn by Radisson were sold out for the three days of the race, although “the room rates were slightly less than last year due to the changed business climate and more hotels coming to Abu Dhabi”, said Guido Bayley, the general manager for the two hotels on Yas Island.

Last month, Germany’s Nico Rosberg was crowned the 2016 F1 world champion while the UK’s Lewis Hamilton won the race.

Since the world championship had not been decided before the race in Abu Dhabi, there was a last-minute pick-up in hotel reservations on the island, with guests from Germany and the UK leading the visitor numbers.

“There was also a slight increase in food and beverage revenues in November due to the Formula One,” Mr Bayley said.

Some of the other hotels in the city also reported an up tick because of the F1.

Dusit Thani Abu Dhabi recorded a sharp increase in occupancy and average daily rate over the F1 weekend, according to Desmond Hatton, the hotel’s general manager. “It did have a positive impact on our incremental revenue streams that mainly comprise food and beverage and spa,” Mr Hatton said.

The growth in the supply of hotels in Abu Dhabi eased compared with the 3.6 per cent average growth during the first 10 months this year, according to STR. The capital added new properties that saw supply increase by 2.7 per cent year on year last month even as the demand on average remained flat.

The average occupancy rate across the city was 81 per cent, a 3.1 per cent decline compared with November last year.

The decrease in occupancy rate came even as rooms got cheaper by 11.1 per cent year on year to Dh660.14.

The declines led to a drop in the revenue per available room by 13.8 per cent to Dh534.97. Abu Dhabi had 24,353 rooms from 104 properties at the end of the third quarter, according to STR. By 2022, it expects to add 23 more comprising 6,235 rooms.

About 60,000 visitors were expected to attend the F1, which was first held in the emirate in 2009.

Follow The National's Business section on Twitter