More hotel openings put pressure on Abu Dhabi room rates

Room rates in the capital came under pressure during last month’s holiday season as more hotels opened their doors.

While demand rose by 1.5 per cent, it was outstripped by supply which grew by 4.4 per cent, according to the research company STR Global.

The hotel room count for December was not available, but in November Abu Dhabi had 23,702 hotel rooms, up by 5.3 per cent year-on-year, it said.

Among the hotels that opened last year was the 318-room, five-star Jannah Burj Al Sarab on Mina Road.

Year-on-year, there was a 2.8 per cent decrease in average hotel occupancy across the capital with 76 per cent in December, even as room rates declined by 6.8 per cent to Dh546.18.

That was lower than in November, when the capital hosted the Abu Dhabi Grand Prix at Yas Island, when the rate was Dh737.70 with an average occupancy rate of 84 per cent, according to the research firm.

“Average rates have dropped due to the continuing economic difficulties being experienced in the main source markets of Russia and more recently, China, coupled with the slowdown in oil exploration-related activity in town due to the ongoing slide in global oil prices,” said John Podaras, a partner at the hospitality consultancy Hotel Development Resources in Dubai.

Last month, the average revenue per available room, a key measure of a hotel’s profit­ability, fell 9.4 per cent year-on-year to Dh415.35. In December 2014, the revenue per available room grew by 19.8 per cent.

“Considering Abu Dhabi’s exceptional demand growth rates, which over a three-year period peaked at 33.4 per cent in August 2013, STR Global analysts expected this trend would eventually wear off after supply caught up with demand,” STR said.

Despite supply outstripping demand, more hotels are on the way in the capital.

Marriott is expected to debut its Edition branded properties in Abu Dhabi Marina this year, with 200 rooms and 57 serviced apartments.

Also this year, the five-star Abu Dhabi Marriott Hotel with 315 rooms and 64 Marriott executive apartments is set to open in the Bloom Central mixed-use development on Airport Road.

Last year, Bloom Hospitality also announced a 188-room hotel apartment building in Park View, a mixed-use development on Saadiyat Island. The opening date of the Park View property was not available.

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