RevPAR Premium Declines For Dubai’s Beach Properties
The sample of hotels in the Jumeirah beach area comprises 22 resort-orientated properties representing 7,400 guestrooms mainly in the luxury and upper upscale categories. By contrast, there are 82 hotels and more than 18,400 guestrooms in the rest of Dubai, the majority of which are in the upscale segment. Both areas of the city matched each other in terms of RevPAR year-on-year percentage change since 2004 as seen in the graph below. The greater volatility in the RevPAR change for the rest of Dubai was driven mainly by changes in ADR. However, the peak in RevPAR in early 2004 was due to comparative improvements in occupancy compared to the previous year when the Second Gulf War began.
Year-on-year percentage change in RevPAR 2004 to March 2009
There has always been a significant difference between the actual RevPAR for the resort properties and those in the rest of Dubai, as the graph below illustrates—a difference that peaked at almost AED1,300 as recently as March 2008. The higher category resort-based properties are able to charge a premium for their sea-views. “The hotels in the Jumeirah beach area have a strong sense of their unique positioning and have largely avoided discounting,” explained James Chappell, managing director of STR Global, of the inequality. However, a rationalization of the market is taking place, and this differential has fallen dramatically and is now around AED500, a difference last seen in 2004.
RevPAR premium of Jumeirah Beach hotels vs. hotels in the rest of Dubai (Dirhams)
About STR & STR Global
For more than 20 years, Smith Travel Research has been the recognized leader for lodging industry benchmarking and research. Smith Travel Research and STR Global offer monthly, weekly, and daily STAR benchmarking reports to more than 36,000 hotel clients, representing nearly 5 million rooms worldwide. STR is headquartered in Hendersonville, Tennessee, and STR Global is based in London. For more information, visit .
Jeff Higley (STR)
VP, Digital Media & Communications
Phone: +1 (615) 824-8664 ext. 3318