ABU DHABI: Hotels in both Abu Dhabi and Dubai saw a drop in revenues per available room (RevPAR) in January, as the strong US dollar discouraged tourists from some parts of the world from travelling.
According to accountancy firm EY’s Middle East hotel benchmark survey, Dubai hotels posted a 9.3 percent drop in RevPAR compared to the same month a year earlier. In Abu Dhabi revenues fell by 15 percent in the same period.
“Hotels in Abu Dhabi and Dubai noticed a drop in KPI’s due to several factors such as additional room supply, general macro-economic conditions coupled with the drop in the Euro making it more expensive for travellers from Europe and reduced visitation from Russia due to the significant devaluation of their local currency to the lowest level ever,” EY said in its report.
Over 2015 as a whole, EY said that both cities recorded the highest occupancy rates in the region at 80 percent, followed by Ras Al Khaimah with 75 percent. Tourism is a key pillar of the economy of Dubai, which has established itself as an entertainment and conference hub. Overnight visitor numbers jumped 7.5 percent in 2015 to 14.2 million, as the emirate built on its policy of attracting tourists from a wide range of countries, aided by the expanded reach of airlines Emirates and Flydubai, the director general of Dubai Tourism, Helal Al Marri, said in January.
Asia was the largest source of growth, with a 26 percent year-on-year jump in Indian visitors to more than 1.6 million people, making India Dubai’s number one source of visitors. South Asia as a whole saw an increase of 21.7 percent year on year, with the rest of Asia rising 17.9 percent, led by a continued gain in Chinese tourists. Turning to 2016, the slackening of economic growth in Asia would be among the main challenges for Dubai’s tourism sector, Almarri said, as would currency fluctuations.
With the US dollar – to which the United Arab Emirates’ dirham is pegged – at multi-year highs against many currencies, the cost of visiting for many has escalated.
The impact has already been seen with visitors from Russia, CIS countries and Eastern Europe slumping 22.5 percent in 2015. The Russian rouble has been hit by the impact of Western sanctions, while Central Asian nations are suffering from the collapse in oil prices. Almarri added Dubai was focusing on attracting families as their numbers were on the rise, especially among Gulf nations — which constituted the largest segment of visitors at 3.3 million in 2015.
