Dubai hotel occupancy rates in February 2012 standing at 86% on a city-wide basis

RevPAR levels showed strong 15% growth over the same period of 2011, reaching USD 226

At the end of 2011, the total hotel supply in Dubai stood at approximately 53,400 rooms, according to the latest Dubai Real Estate Outlook from Jones Lang Lasalle.

Several projects that were initially expected towards the second half of 2011 have been delayed into 2012 with two of these opening in the first quarter of 2012. Millennium Plaza, Sheikh Zayed Road and Rixos The Palm added about 700 branded rooms to the Dubai hotel market.

Approximately 5,100 additional guest rooms are expected to be completed until the end of 2012 with major projects including Al Khor Rayhaan (Al Ghurair City), Fairmont The Palm, Jumeirah Creekside Hotel, Novotel Al Barsha and Movenpick Jumeirah Lake Towers amongst others.

A number of major new projects have been announced over the past few months including the redevelopment of the Metropolitan Hotel site and the launch of a new Arts district with an opera house in Downtown Dubai featuring a hospitality component. These new projects reflect the improved confidence in the city‟s tourism industry and the continuous commitment towards development of tourist sites in Dubai.

The recovery in trading performance experienced during 2011 has continued over the first 2 months of 2012 with occupancy rates in the YT February 2012 standing at 86% on a city-wide basis, 4 percentage points higher than in the same period in 2011.

While 2011 witnessed an increase in occupancies, average room rates continued to fall. The strengthening recovery in the hotel markets is reflected in an increase in ADR‟s over the first quarter of 2012. Average rates showed an increase of about 9% during the first two months of 2012 compared to the same period in 2011, with several sub-markets witnessing improvements exceeding 10% in ADR levels in January – February 2012.

Average rates witness an improvement after two years. As a result of resurgence in occupancy and increased ADRs; RevPAR levels have witnessed a double digit increase by 15% on a city-wide basis.

The real estate advisory firm expects approximately 11,300 units to enter Dubai hotel market between 2012 and 2014.