RAK’s hospitality continues to generate positive visitor and occupancy growth
- Visitor numbers witness a 3.1% increase during the first nine months of 2017 - Overall airport traffic through Ras al-Khaimah International Airport grew by 17.6% in the nine months to 2017, versus the same period in 2016 - Over 2,500 hotel keys are currently under construction in RAK
Dubai, 8 November 2017 – RAK’s tourism sector has continued to buck the negative trends experienced across much of the Middle East region, posting growth in both tourist arrivals and year-to-date occupancy rates in the nine months to September 2017, according to the Q3 2017 Ras al-Khaimah MarketView by global real estate consultancy firm, CBRE. Ras al-Khaimah International Airport witnessed an increase in passenger movements, whilst also overall visitor numbers also grew. The Emirate recorded 631,317 visitors during the first nine months of 2017, against an annual target of 900,000 - resulting in a 3.1% increase over the same period last year. “Guest nights also registered solid growth, rising 12.4% to around 2.2 million during the first nine months of the year. Domestic demand from UAE Nationals and other UAE residents remain the key source of demand. However, the number of international visitors is also growing rapidly as the Emirate invests in new target markets, which includes Northern Europe, China and India,” commented Mat Green, Head of Research & Consulting UAE, CBRE Middle East. As part of the plans to further increase average length of stay and to generate a more compelling all-year-round leisure offering, various new tourism infrastructure developments are being delivered. This includes the world’s longest zip line (2,500 meters) and an observation deck at the top of the Jebel Jais mountain, which are both expected to open before the end of the year. “With visitor numbers steadily increasing, and with limited new supply being added to the market, RAK’s hotels have continued to generate positive occupancy growth, with a 3.5% increase in year-to-date occupancy rates*. Occupancy rose from 70.5% in 2016 to reach 72.9% in year-to-date September figures for 2017,” said Green.
He continued, “However, ADRs dropped by around 3.5% year-on-year, due to a combination of macroeconomic factors and growing competition from other domestic and regional tourist destinations. Thanks to the continued increase in occupancy rates, average RevPARs have remained stable at around AED 418/room/night.” The Emirate’s hospitality stock will receive a supply boost in 2018, with the anticipated completion of around 750 new rooms. This includes the opening of the 200 key CityMax Hotel in RAK City, and the 410 room Park Inn by Radisson Al Marjan Island. In total, there are now over 2,500 keys currently under construction in RAK, with the majority located within the Al Marjan Island and Mina Al Arab masterplans. This equates to more than 40% of the existing supply, with most rooms to be delivered by 2020. “RAK’s tourism market is set to enjoy another strong year, with visitor numbers currently on target to better the 2016 total. With minimal new supply entering the market during the remainder of 2017, this will likely translate into positive growth in overall occupancy rates, as hotels buck wider regional trends,” commented Green. Looking at the residential market, the report stated that rental rates continue to experience deflationary trends, which has been driven by weak demand fundamentals and the impact of downward rental pressures in neighbouring Dubai and Sharjah. “Over the quarter, average rentals fell by around 3%, bringing the full-year drop to 8%. Average apartment rentals in Mina Al Arab and Al Hamra Village range from AED20-30,000/unit/annum for Studios, AED35-50,000/unit/annum for 1-bedrooms, and AED59-65,000/unit/annum for 2-bedrooms,” concluded Green.