STR Global’s preliminary March 2015 data for Dubai indicates strong supply growth.
Based on daily data from March, Dubai reported:
- increases in both supply (+6.9 percent) and demand (+4.5 percent);
- a 2.2-percent decrease in occupancy to 85.7 percent;
- a 6.1-percent decrease in average daily rate to AED978.69; and
- an 8.1-percent decrease in revenue per available room to AED838.69.
“Dubai was always going to find it difficult to achieve the same performance levels of 2014, with the first quarter of last year being one of the strongest on record”, said Elizabeth Winkle, managing director of STR Global. “This factor, combined with a few others, such as new supply entering the market, declines from some of the traditionally strong feeder markets such as Russia and Ukraine, and the progress of competing markets like Egypt and Lebanon, has all combined to create additional challenges for Dubai. That said, as always, Dubai showed its resilience as a market and reported one of the highest RevPAR performances globally for the quarter in U.S. dollar terms (US$224.08).
“Supply has been increasing at levels in excess of 6.2-percent for the last 15 months”, Winkle continued. “This new supply is critical for the ongoing success of the city. Additionally, despite the 2.2-percent drop in occupancy, levels continued to exceed 85 percent in March for the sixth consecutive month”.
STR Global will release March 2015 results in one week. The April edition of the STR Global Hotel Market Forecast is now available.