Dubai Hotels Operating Profits Decline by 19.5% in April

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Typical for the month of April, Dubai hotels welcomed fewer tourists and business travelers. Slowing business season and increasing summer heat are the main factors for the registered decline in revenues. A 12.8% reduction in ARR to US$373.78 had a significant impact on the hotels’ profitability in April, which fell by 19.5% compared to the same period last year.

The combined effect of the falling Euro and stronger US Dollar is one of the key challenges facing the city, forcing hoteliers to reduce ARR in order to maintain occupancy levels at 84.9%, which is still one of the highest in the world.

Food and beverage revenues were also impacted, falling by 19.8% and 26.7% respectively, resulting in a 15.7% decline in total revenue per available room, reveal statistics from HotStats.

Higher operating expenses compounded the lower overall revenues, forcing gross operating profit per available room (GOPPAR) down by 19.5% to US$273.13.

The decline in revenues is expected to persist during the summer months, with the exception of the Eid Al Fitr holidays, which fall by the end of Ramadan.

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