Dubai tourism sees hotel guest nights fall 16% in Q109

Dubai's tourism industry slowed in the first quarter with hotel guest nights falling 16 percent and revenues dropping 15 percent as the global recession hit the sector, official data has shown.

The emirate, which attracts more visitors each year than any Arab country outside of Egypt, hosts a major shopping festival in the first quarter that typically attracts streams of regional visitors.

However, a global slowdown in the travel sector saw Dubai hotels down 16.4 percent in the first three months of 2009 to 3.87 million, according to data from the Department of Tourism and Commerce Marketing (DTCM).

Although, the total number of hotel guests, excluding hotel apartments, grew 3.7 percent in the same period to 1.62 million, DTCM said in data received by email on Sunday.

To remain competitive hotels had also reduced room rates, with hotel revenues witnessing a 14.9 percent fall to AED3.14bn ($854.9m), the data showed.

"The drop-off in demand is hardly surprising," HSBC economist Simon Williams said in a client note on Monday.

"Three of Dubai's key tourist markets - the UK, the euro zone and Russia - are in recession, with depressed consumer confidence and rising unemployment weighing heavily against discretionary leisure spending."

Occupancy rates for hotels in Dubai also fell to 73 percent in the first quarter, from almost 90 percent last year, the data showed.

"Tourist arrivals are important not only for the hotel industry itself, but also the broader service and retail sector," HSBC added.

However, the number of people staying in hotel apartments, which offer family-sized serviced accommodation, rose 14 percent in the first quarter while guest nights rose 2.5 percent.

Consumer confidence in the UAE fell sharply in the six months to April with residents worried about job security fearing the oil exporter faced recession for longer than a year, market research firm Nielson said last week.

 (Additional reporting by Daliah Merzaban; Editing by Jon Loades-Carter)

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM