Higher supply pushes room rates lower in Abu Dhabi hotels

Increased room supply and lower demand pushed occupancy and room rates lower at Abu Dhabi hotels during September 2016.

According STR’s preliminary monthly data, supply increased 3.9 per cent while demand dropped three per cent.

While hotel industry in the UAE capital saw 6.7 per cent decrease to 68.9 per cent while average daily rate (ADR) dropped 6.4 per cent to Dh400.50.

Revenue per available room registered 12.6 per cent decline to Dh275.8 during the month.

The absolute ADR level would be the lowest for a September in Abu Dhabi since 2005. At the same time, ADR in the market increased from last month (AED348.61 in August).

STR analysts attribute the market’s overall performance declines to supply growth substantially outpacing demand.