Rotana loses 25% profit, occupancy, rates in Dubai

RATES FALL: The COO of Rotana has said that hotel rate in Dubai must come down to a ore competitive level. (Getty Images)

Dubai’s Rotana hotels have lost 25 percent in profit, occupancy and rates in the last year, the vice executive chairman of the hotel group revealed on Tuesday to Arabian Business.

Imad Elias, admitted that hotel rates had risen too high in the emirate as result of “arrogance” among hoteliers, and it was now time for them to fall again to a more competitive level.

According to Hotels.com Hotel Price Index, Dubai hotels were the second most expensive in the world, after Moscow, in the fourth quarter of last year - the average price of a room was listed at AED953 ($260).

“Unfortunately today we are suffering a drop in occupancy and in the average rate in Dubai. We have lost 25 percent in Dubai, in occupancy, in rates and in profits,” said Elias who is also the hotel group’s chief operating officer.

“I think they should look at the rates, be more flexible with tour operators, and go back, and tell the tour operators or the decision makers ‘we were a little bit arrogant, now we are going back to earth and we are ready to take you back with a rate that is competitive with other parts of the world’,” he told Arabian Business.

Elias made his comments as he called on other hotel groups in Dubai, where Rotana has 13 hotels, to be more transparent about their occupancy levels during the economic slowdown.

The large supply of hotel rooms in the city had impacted heavily on occupancy, he said, pointing out that Abu Dhabi was fairing better because it had just a fifth of the 100,000 rooms available in Dubai.

A recent Deloitte and Touch survey revealed that in February hotel revpar (revenue per available room) dropped 35 percent in Dubai.

“I don’t feel [Dubai hotels are] telling the truth. They are not being very transparent unfortunately."

“Dubai is a city that is a little bit sick – but it will never die. It will stand up again big time. It needs another two years,” he predicted.

Although Rotana had lost profits it was still doing better than most, due to its higher market share, Elias added.

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READERS' COMMENTS

Finally someone honest
Posted by agreed, Dubai, UAE on Thursday 7 May 2009 at 13:18 UAE time


Well said that man. It has been obvious to all that the hotels must be suffering in Dubai - and that they have been way overpriced. Yet all they do is deny any change in occupancy rates.

Finally someone has the honesty and decency to tell the truth. Lets hope he benifits from his transparency and that this hotel group is amongst the first to recover.

Rotana and Dubai hotels business slump.
Posted by hombil, Muscat, Oman on Wednesday 6 May 2009 at 15:32 UAE time


Bravo, I admire Emad Elias' frankness and hope that all the CEOs/COOs of other hotels agree with him. Dubai hotels, and for that matter, some of the furnished apartments too had gone beyond the reach of travellers.

Most business travellers from Oman preferred to return from Dubai same day rather than spend a night there only because of the absorbitant and unrealistic hotel rates.

Hope common sense would prevail amongst the so called "arrogant" hoteliers of Dubai.

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