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Dubai hotel industry records worst month in 18 years with 45% occupancy

Dubai hotels have experienced their worst month in 18 years, newly released July occupancy rates show. This is particularly bad news for UK property investors that own and rent a Dubai property on a short-term basis to tourists.

A sharp increase in the supply of Dubai hotel rooms (up 8.3%) coupled with a significant fall in demand (-4.5%) saw the emirate record an 11.8% drop in hotel occupancy for the month, to less than 50% on average, according to STR Global, which monitors hotel occupancy rates each month.

The 45.4% percent occupancy rate is almost half the 80-plus level Dubai had been averaging earlier this year. It is the worst monthly data since records began in 1996, according to STR Global.

The fall also drove down revenue per available room (RevPAR) by 7.4% to AED 290.23 (£47.27). However, for some unknown reason, rather than attempt to boost hotel occupancy with reduced rates, the hotels actually hiked the prices up, increasing the average daily rate by an average 5% to AED638.66 (£104 per night).

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