Hotels:
· There were no major hotel openings in during Q1 2016, with the principal opening being 213 serviced apartment units within Andalus Al Seef resort and spa in the Grand Mosque Area.
· An additional 3,300 hotel rooms are expected to enter the market by the end of 2016 with the opening of the Grand Millennium Bab Al Qasr, Gloria Downtown, Marriott, Fairmont Marina and Grand Hyatt hotels. Most of these properties will be positioned in the 4 and 5 star categories, further skewing the market towards the upscale to luxury segment.
· Demand continues to grow quarter on quarter, principally driven by wide-ranging government initiatives to increase tourism, including the expansion of the International Airport and the national carrier Etihad Airways, the further improvement of Abu Dhabi’s leisure offering and attractions, the hosting of world-class events and major campaigns by the Abu Dhabi Tourism and Culture Authority to promote Abu Dhabi internationally.
· While tourism growth continues, Abu Dhabi’s hospitality market continues to rely heavily on corporate demand – which has suffered over recent months due to the decline in oil prices and resultant impact on government spending. Accordingly, occupancy rates decreased slightly (almost 2 percentage points to reach 78% for the first two months of 2016), but with the greatest pressure on Average Daily Rates (dropping by almost 19% in YT February 2016 compared to the same period last year). As a result, RevPAR was also heavily impacted with a decline of 21% in YT February 2016.
· David Dudley commented “The outlook for the hospitality sector remains positive, driven by major government-backed projects to drive tourism growth, resulting in major increases to annual visitor arrivals. Amidst general spending cuts there is increased evidence of continued government continuing to invest in mega tourism projects, particularly on the flagship Yas and Saadiyat Islands.”
