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Strong growth and performance for Abu Dhabi’s hospitality sector

Strong growth and performance for Abu Dhabi’s hospitality sector

April 2016

While Abu Dhabi’s hospitality market saw subdued performance in the years leading up to 2013, the market has since gone from strength to strength, with three consecutive years of RevPAR growth. Growth in 2015 was particularly impressive not only in light of global economic factors, but also relative to other hospitality markets in the GCC.

Ali Manzoor, Associate Partner at Knight Frank, commented: ‘‘Whilst Abu Dhabi has historically been driven by corporate and MICE visitation, leisure tourism has seen a boost over the past few years supported by the development of leisure demand generators including Saadiyat Island, Yas  Waterworld, Yas Mall, and the Du Arena. This trend is expected to continue as future demand generators such as the upcoming Cultural District are completed. As a result, the more diversified demand base should be less susceptible to external forces.’’

The declining oil price has had an impact on visitation in the capital, with many hotel operators indicating that there was a softening of corporate demand particularly in terms of oil and government related visitation. With oil prices forecast to fall further in 2016, this trend is likely to continue –  however this is anticipated to be counterbalanced to some degree by increasing leisure demand.

Manzoor notes that the luxury hotel sector in Abu Dhabi has undergone rapid transformation since 2011.

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