Hotel rates in Dubai will be impacted next year by rising competition and a strong US dollar despite the emirate’s hospitality sector proving to be resilient in the face of more challenging economic conditions, locally and globally, said a report.
Although the emirate welcomed 10.5 million visitors during the first nine months of the year, registering 9 per cent growth over 9.6 million during the same period in 2014, the year-to-date occupancy rates for the first 10 months of 2015 were down around 1 per cent at 77 per cent, CBRE reported in its Dubai Annual Market Update.Average daily rate (ADR) and revenue-per-available-room (RevPAR) performances suffered more markedly, falling 7.6 per cent and 9.5 per cent respectively. This was largely attributed to increased competition amidst rising room supply, with over 6,000 new hotel and hotel apartment keys delivered during 2015, it said. CBRE said increasing competition and a strong US dollar are likely to maintain deflationary pressures on ADRs in the short-to-medium term.However, it added that it expects occupancy rates to fare better amid strong visitor growth with 22,000 rooms expected to be delivered between 2016 and 2018.