Dubai hotels report lower occupancy, room rates in December

New Year’s Eve is one of the busiest for Dubai hotels, and rooms are usually sold out despite higher posted rates as hoteliers take advantage of the increased demand. (AFP)
Updated 14 January 2019
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Dubai hotels report lower occupancy, room rates in December

  • ‘Demand continues to grow, but an influx of new inventory is pressuring occupancy and ADR levels’
  • New Year’s Eve is one of the busiest for Dubai hotels, and rooms are usually sold out

DUBAI: The entry of new keys in Dubai’s hotel market pressured occupancy and room rates in December, preliminary data from industry monitor STR show.
“The story remains the same for Dubai. Demand (room nights sold) continues to grow, but an influx of new inventory is pressuring occupancy and ADR levels,” the London-based group said.
For the month, average occupancy rate in Dubai hotels dipped 2.7 percent to 79.2 percent while average daily rate (ADR) went down 4.3 percent to 758.80 dirhams.
Revenue per available room (RevPAR) in December was 6.9 percent lower to 600.98 dirhams as hotel room supply rose faster at 8.6 percent compared with the demand at 5.6 percent.
ADR and RevPAR are the hotel industry’s performance metrics, with the first one derived by dividing room revenue by rooms sold and the second calculated by multiplying a hotel’s ADR by its occupancy rate.
JLL Mena in an earlier report said that a further 1,400 rooms were added to the market in the third quarter of 2018, bringing the total stock of quality hotel rooms in Dubai to almost 88,100 keys.
Among those the opened their doors to guests were Hampton by Hilton in Qusais with 420 keys; Garden Inn in Jaddaf with 336 keys and Grand Millennium Business Bay with 251 keys.
“When looking at individual days during the month, New Year’s Eve was the strongest with occupancy reaching 97.1 percent and ADR at 1,703.15 dirhams,” STR said.
New Year’s Eve is one of the busiest for Dubai hotels, and rooms are usually sold out despite higher posted rates as hoteliers take advantage of the increased demand.
The market closed the month with five consecutive nights of occupancy above 90 percent, it added, most probably due to the return of the fireworks display at Burj Khalifa as part of New Year festivities that attract throngs of local tourists and international visitors.
Emaar, the developer of the world’s tallest building, earlier opted for a light and laser show to celebrate the 2018 New Year’s celebrations.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.