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Plummeting Room Rates Threaten Profit Levels at Abu Dhabi Hotels



Despite room occupancy levels at hotels in Abu Dhabi remaining above 80 per cent this month, the relentless decline in achieved average room rate is threatening both top and bottom line performance levels, according to the latest data from HotStats.

In addition to a 3.1 percentage point drop in room occupancy, achieved average room rate plummeted by 18.6 per cent this month, contributing to the 21.6 per cent year-on-year decline in RevPAR (Revenue per Available Room), to $101.08.

The decline in achieved average room rate In March continues the downward trajectory in this measure, which has been unrelenting, falling by 16.6 per cent over the past 36 months to $135.29 in the 12 months to March 2017 from $162.27 during the same period in 2013/14, with the drop accelerating in Q1 2017.

This is despite the country’s economic minister forecasting economic growth of between 3.5 to 4.0 per cent in 2017 and the Abu Dhabi Tourism and Culture Authority expecting the growth in the number of visitors to the city to exceed last year’s increase of eight per cent.

As a result of falling top line revenues, hotels in Abu Dhabi have struggled to maintain profitability, with profit per room falling by 27.0 per cent over the last 24 months to $54.42 in the 12 months to March 2017.


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About the author

Juergen T Steinmetz

Juergen Thomas Steinmetz has continuously worked in the travel and tourism industry since he was a teenager in Germany (1977).
He founded eTurboNews in 1999 as the first online newsletter for the global travel tourism industry.