Data from STR Global, a leading provider of market
information to the global hotel industry, illustrates the difference in
performance of Dubaiís hotels in the Jumeirah beach area and those in
the rest of the city.
Dubai has suffered dramatically compared to the
overall Middle East region as a result of the recent economic
crisis. The year-on-year percentage change in revenue per
available room (RevPAR) through March 2009 declined 35.9% in
Dubai, driven mainly by falls in average daily rate (ADR); RevPAR
decline for the entire region was only 13%.
The sample of hotels in the Jumeirah beach area
comprises 22 resort-orientated properties representing 7,400
guestrooms mainly in the luxury and upper upscale categories.
By contrast, there are 82 hotels and more
than 18,400 guestrooms in the rest of Dubai, the majority of which
are in the upscale segment.
Both areas of the city matched each
other in terms of RevPAR year-on-year percentage change since 2004. The greater volatility in the RevPAR
change for the rest of Dubai was driven mainly by changes in ADR.
However, the peak in RevPAR in early 2004 was due to comparative
improvements in occupancy compared to the previous year when the
Second Gulf War began.
There has always been a significant
difference between the actual RevPAR for the resort properties and
those in the rest of Dubai - a
difference that peaked at almost AED1,300 as recently as March
2008. The higher category resort-based properties are able to
charge a premium for their beach access and sea-views.
ďThe hotels in the Jumeirah beach area have a
strong sense of their unique positioning and have largely avoided
discounting,Ē said James Chappell, managing director of STR
Global, of the inequality. ďHowever, a rationalization of the
market is taking place, and this differential has fallen
dramatically and is now around AED500, a difference last seen in
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