Average hotel rates in Dubai continued to fall during the first quarter of 2017 while occupancy levels remained strong, according to a new report.
JLL's Q1 2017 Dubai Real Estate Market Overview report said Q1 saw a continuation of the same trends seen last year.
The first two months are usually among the strongest of the year - supported by Dubai’s annual shopping festival - and Dubai hotels saw occupancy rates rise 3 percent to 86 percent in the year to February.
JLL said occupancies have been achieved at the cost of a marginal fall in average daily rates (ADR) which fell almost 5 percent from $233 in 2016 to $221.
"Increased competition with the opening of several properties in the last few months and pressure on companies’ travel budgets are among the factors driving down ADR levels," said JLL.
The report said 1,100 keys were added to the Dubai hospitality market during Q1, taking the total to 79,000 keys.
Further expected completions this year include the renovation of The Address Downtown and the Viceroy on the Palm, JLL said, adding that the 5-star segment is expected to dominate the completions during this year, with 3-star hotels still lagging at just 12 percent of the total.
SCROLL TO CONTINUE WITH CONTENT
"This suggests that although Dubai is diversifying its product mix, it remains largely concentrated towards higher tier market offerings," its report noted.