Atlantis The Palm expects to increase its average room rate this year despite a squeeze on the rates across Dubai.
On Palm Jumeirah, the average room rate is expected to reach US$443 for April through June, and will increase to touch $480 during the year, according to the consultancy Colliers.
Atlantis The Palm, owned by Investment Corporation of Dubai (ICD), expects to break through the $500 a day room rate this year while keeping its occupancy levels steady at 88 per cent.
“There is an impact of the larger amount of inventory coming on board, especially on the Palm and that is a big situation for us, but we knew this would happen,” said Ravini Perera, senior vice president for sales and marketing at Atlantis The Palm. “We don’t want to compete in any form of price war.”
The 1,539-room property is adding 800 more rooms that are expected to come on to the market at the end of 2017. The $1.5 billion expansion would also add 234 residences, including one to three-bedroom apartments, villas and apartments that are expected to be ready by next month.
The upbeat mood at the Atlantis comes at a time when Dubai’s room rates at four and five-star properties continued to slip.
In March, these fell by 5.5 per cent to touch $380.85 year on year, according to data from HotStats. Even as occupancy levels stayed at 88.8 per cent, revenue per available room fell by 4.8 per cent to $338.25 during the same period.
The growth in demand is likely to remain subdued in the next couple of years, but occupancy levels in Dubai are expected to remain in the 70 to 75 per cent range, according to Rashid Aboobacker, a senior consultant for TRI Consulting.
“The growth in supply will have an impact on the market if it exceeds the demand growth. However, it is difficult to quantify this impact in isolation as the demand growth is dependent on several macro-economic factors, including economic growth and global and regional travel trends,” he said. Subdued oil prices besides a weak euro and rouble and a strong dollar are putting pressure on Dubai’s tourism market.
“Russia is one of our bigger markets and some tour operators there have gone out of business, so the impact of the [slowdown] of the Russian market is significant,” Ms Perera said.
To attract visitors during the slow summer months, Atlantis is offering an all-inclusive deal for a family of four for Dh1,595 through September that includes unlimited complimentary access to the Lost Chambers and Aquaventure Water Park.
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