Abu Dhabi top UAE occupancy rates in first half amid war fallout

Abu Dhabi's hotel industry led occupancy rates in the UAE during the first half of 2022, amidst the fallout from the Iran war. JLL, a consultancy, reported Abu Dhabi's occupancy at 66.8% for the six months, holding steady at 65.2% in June. The average daily rate (ADR) was Dh668.30 for the period, and Dh486.80 in June, slightly lower than the previous year by 4.3% and 2.1%, respectively.

However, revenue per available room (RevPAR) fell by over 20% to Dh446.60 in the first half and 12.1% to Dh317.60 in June. Dubai's hospitality sector had lower occupancy rates of 56.4% and 51.6%, with ADRs at Dh701.10 and Dh375.60, respectively. RevPAR declined by more than 35% to Dh395.70 in the first half and nearly 39% to Dh193.90 in June.

Ras Al Khaimah saw an occupancy rate of 49.6% in the first half, with ADR rising to Dh705.60. For June, occupancy dropped by 33.6%, ADR fell by 11.6% to Dh511.60, and RevPAR declined by 28.6% to Dh347.70 and 50% to Dh172.10. JLL attributed the performance to the ongoing regional conflict and quieter summer months. Both periods experienced about a third drop in RevPAR, reaching Dh394.20 and Dh209.40, respectively.

Operators responded by focusing on domestic demand, implementing discounts, bundles, and staycations to offset the pullback in international arrivals. Government initiatives, such as Dubai's Dh2.5 billion relief package, cushioned the industry from immediate headwinds by easing cost pressures and preserving liquidity. The Iran war, a significant geopolitical crisis, hit sectors like hospitality, aviation, and tourism hard.

The UAE managed to recover faster due to government support programs and adjusted project timelines. Some hotel operators temporarily closed properties for renovations, and hotel stocks remained steady in Abu Dhabi and Dubai.