Hospitality chief expects tough H1 in 2009

LUXURY HOTEL: The Harbour Hotel in Dubai Marina is part of the Emirates portfolio.

A senior hospitality industry official in Dubai has said the early part of 2009 will be tough and costs will have to be re-examined in an effort to cope with the global economic crisis.

Tony Williams, senior vice-president, Emirates Hotels and Resorts, said that the financial slowdown was likely to curb the plans for new openings but that the projects would still go ahead toward the end of the year and into 2010.

"The first half of 2009 is going to be tough. We need to run a fine tooth-comb through our cost base and, with possibly lower occupancies than we expected, focus on our strengths and weaknesses. We must do this without compromising our service standard of course," he said in comments published by Emirates Business.

"This year, there maybe a pause in the rapid opening of hotels and hospitality units, but we'll see many of these projects opening towards the end of 2009 into 2010."

Williams said hoteliers in Dubai had become fairly complacent with year-on-year rate increases of up to 15 per cent over the past five or six years.

But in October and November, he said, the global crisis hit the company's major supplier economies of UK and Europe, and as many companies began tightening their belts, business travel was curtailed.

Emirates Hotels and Resorts is the premium hospitality division of the Emirates Group and its portfolio include the Harbour Hotel and Residence in Dubai Marina and Al Maha Desert Resort and Spa, located within the Dubai Desert Conservation Reserve.

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READERS' COMMENTS

The Bubble is finally bursting
Posted by JC, Dubai, UAE on Monday 19 January 2009 at 18:07 UAE time


It’s refreshing to see that hotels are finally waking up to the fact they are going to have to drop their prices just to compete with other tourist destinations. It’s a fact that many Europeans will not be holidaying this year and those that will have that luxury will certainly look for short haul destinations to visit as opposed to making the 7/6 hour trip to Dubai. Its quite un believable that the Hotels did not see this coming when the crisis started and instead, as in other industries, were living in denial for the first 3 months of the crisis instead of offering attractive deals even before the Xmas period. The Hotels will only be playing catch up from here on in with the crisis predicted to go on and bottom out in Q4 2009 at the earliest.

I also noticed that Mr. Williams did not go as far as hinting at potential staffing cuts which is surely inevitable??

If the Hotels’ think the situation is bad now then I think they are going to have to redefine terrible!!!!

Time to get things to normal
Posted by Tarek Helmy, Abu Dhabi, UAE on Sunday 4 January 2009 at 10:02 UAE time

There is no doubt that the financial crisis will strongly affect the occupancy rates in the UAE hospitality sector. If we look at the hotel rates particularly in Dubai, we will realise that they have become almost the highest in the world, which is really amazing. At the same time, we can see most of the workers at this sector suffer from being underpaid!!!! Many have been leaving their jobs either back home or searching for better offers!! This looks more strange as well!! This means to anyone that hotels are making huge profits even without considering any increase in salaries. I believe here is the time for this greedy sector to correct the price per night.

Hotel standards
Posted by Natasha D, Dubai on Sunday 4 January 2009 at 08:30 UAE time

I must say the standards of 5 star hotels has gone down considerably. We are faced with unfriendly staff and extremely slow service. Hotels must NOT cut customer service amid the economic crisis, because it will ultimately ruin the reputation of the hotels.

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