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Dubai's hospitality sector No.1 in Mena

Maintaining the highest occupancy at 85.7 per cent and highest revenue per average room (RevPAR) of USD 246, Dubai's hospitality market has emerged as the top Mena performer in January 2017.

Dubai beach hotels had the highest revenue per average of USD 343, while city-based hotels in Dubai recorded the highest occupancy at 87.6 per cent, according to the January 2017 Mena Hotel Benchmark Survey Report.

However, average room rates and revenue per average dropped 8.1 per cent and 7.3 per cent percentage points respectively in January, which could be a result of an oversupply of rooms, encouraging the sector as a whole to lower room rates to remain competitive.

Meanwhile, Abu Dhabi's hospitality market maintained a strong occupancy of 77 per cent in January 2017, but witnessed a decrease in revenue per average and average daily rate (ADR) of 11.8 per cent and 10.6 per cent when compared to the period last year.

"Overall, the majority of the hospitality market across the Middle East witnessed a decrease in KPIs [key performance indicators] in January 2017, when compared to the same month last year. In the GCC, all markets except Kuwait recorded lower RevPAR, reflecting the slowdown in performance witnessed across the wider Mena region," said Yousef Wahbah, Mena head of transaction real estate at EY.

In Saudi Arabia, Riyadh and Jeddah's hospitality markets witnessed a drop in revenue per average by 22.6 per cent and 27.5 per cent respectively when compared to the same period last year. The drop in Riyadh and Jeddah's hotel performance may be ascribed to the decreased number of conferences and exhibitions due to corporate spending cuts in both the public and private sectors.

The average room rate more than doubled increasing 109.2 per cent from USD 43 in January 2016 to USD 91 in January 2017.