Abu Dhabi received more than 1 million hotel guests in the first five months of 2013 building upon the growth in arrivals seen in 2012 when the city received 2.3 million guests.
However, the impact of the increase in visitor arrivals on the hotel trading performance has been offset by the significant increase in supply experienced between 2009 and 2012.
While occupancy levels have witnessed an 8% increase during the first five months of 2013; average daily rates have continued to remain under pressure, declining by 2%.
Within the last four years, hotels have resorted to heavy discounting in order to push up occupancy levels across the city.
Due to the positive growth in occupancies, RevPAR levels in the YT May 2013 have experienced an increase of nearly 11% compared to the same period last year.
While tourism in Abu Dhabi continues to be driven by the corporate and MICE (Meetings, Incentives, Conferencing, Exhibitions) segments, several efforts are being made to diversify the tourism demand base by focussing on the leisure segment.
Hotel supply
The second quarter of 2013 witnessed the opening of two internationally branded hotels providing almost 600 additional rooms comprising the Dusit Thani on Muroor Street and the Rosewood at Sowwah Square.
These additions continue the significant levels of new supply seen in recent years. About 1,400 rooms have been added to the Abu Dhabi market in the first half of 2013.
There remain a number of major projects scheduled to open later in 2013. These include St. Regis Nation Towers, Novotel and Adagio Al Bustan.
About 4,500 additional rooms are expected to enter the market by the end of 2015, which reflects a reduction in the previous pipeline planned for the city.
Many of the planned projects have experienced delays and the recent over supply has resulted in no major new hotel projects being announced recently.
Overall supply is expected to reach about 21,500 rooms by the end of 2015 representing a CAGR of 8%.
