Dubai Hotels Reduce Room Rates To Cope With Rising Supply

Dubai hoteliers are reducing room rates ahead of Expo 2020 to help stimulate demand, according to analysts STR.

Hotels in Dubai witnessed significant growth in demand (room nights sold) in August but performance levels remained low due to pressure from increased supply. This was revealed by STR report.

Although demand for the month rose 7.4% compared to the same period last year, a subsequent 7.6% increase in supply saw occupancy level dropped 0.2% to 68.5, with average daily rate (ADR) dipping 12.5% and revenue per available room (RevPAR) declining 12.6%.

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STR analysts note that as the market prepares to host Expo 2020, hotel rooms are being competitively priced to stimulate demand and keep up with accelerating room supply. This has been a common trend among the majority of key markets in the Middle East since the drop in oil prices in 2014.

 

STR analysts noted that the move to reduce room rates to keep up with increasing room supply has been a common trend among the majority of key markets in the Middle East since the drop in oil prices in 2014.

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