Abu Dhabi occupancy levels rise following strong tourist demand

Hotels in Abu Dhabi saw a surge in demand during March, boosting profits by 14.3 percent, according to the latest HotStats survey of full-service, four- and five- star hotels by TRI Hospitality Consulting Middle East.

Abu Dhabi hotels reported growth in key performance indicators throughout the month of March, as a 4.3 percentage point increase in hotel occupancies coupled with a 2.2 percent increase in average room rate to US$157.76 lifted RevPAR by 7.8 percent. Conference and banqueting continued to provide a strong demand base for the city’s hotels, with ARR being driven by rate growth within corporate and conferencing segments of 12.4 percent and 9.7 percent, respectively. A decline in food and beverage consumption softened TRevPAR to an increase of 4.0 percent to US$274.74, however strong top-line revenues coupled with lower payroll costs and operating expenses boosted GOPPAR by 14.3 percent to US$103.92.

“Abu Dhabi has witnessed a consistent rise in demand during the first quarter of 2014, with occupancies increasing 4.4 percentage points to 79.1 percent. The expansion of Etihad Airlines helped draw over 4.5 million passengers to Abu Dhabi International Airport during the first quarter which saw passenger numbers rise 15.1 percent from the previous year. The leisure segment experienced the highest growth in demand during the first quarter of 2014, with recreational facilities on Yas Island and Saadiyat Island generating increased demand for hotels in the capital” commented Peter Goddard, Managing Director of TRI Hospitality Consulting.

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Hotel companies have also been investing in Abu Dhabi. Accor opened the Novotel Abu Dhabi Al Bustan earlier this year, with Adagio to follow. In February, Starwood Hotels & Resorts Worldwide signed an agreement to open a new 172-room Aloft hotel in Al Ain, the second largest city in the emirate. And just last week, Abu Dhabi Commercial Bank signed an approximately $258-million loan deal with National Investment Corporation, the developer of the breakwater area in Abu Dhabi, for the development of the new Fairmont hotel.