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Sun 17 May 2009 03:37 PM

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Burj Al Arab maintains room rates despite global crisis

Owner Jumeriah Group has cut room rates by 30% at other hotels, but Burj unaffected.

Dubai's Burj Al Arab Hotel - billed as the first seven-star hotel in the world - has escaped a room-discounting move by owner Jumeirah Group, to shore up demand during the global downturn.But, other hotels in the group's portfolio have had to make steep price cuts of up to 30 percent, admitted CEO, Gerald Lawless, on the sidelines of a world tourism conference in Brazil on Saturday. The Burj Al Arab was still enjoying good occupancy rates, which were "less than last year but within our expectations," he said, but declined to give specific figures.

Yet, discounts and promotions had been implemented at its other hotels since November, to ensure demand was maintained during the global crisis, he added.

"At the end of November, bookings were slowing down, so we started offering healthy discounts up to 30 percent for our source markets in the UK, Germany and Russia to stimulate demand," he said.

The group was maintaining client numbers from those three key markets, Lawless said, though he noted that reservations were increasingly coming later in a bid to secure cheaper prices.

"The luxury sector is certainly resilient to the crisis but this is also motivated by promotions and prices."

Two of the group's properties in Dubai, the Jumeirah Beach Hotel and the Madinat Jumeirah, are keeping occupancy high, with 90 to 95 percent of the rooms filled between February and April at an average price of $570 dollars per night, Lawless said.

The group, which owns 11 hotels, in Dubai, Britain and the United States, plans to forge on with ambitious expansion plans that will see it running 60 properties by 2012.

"Despite the global economic downturn we maintain our objectives," Lawless said.

The group, part of Dubai Holdings owned by the ruling family of the Gulf emirate, intends to open its first Asian hotel in Shanghai this year, and has just signed a contract to open a hotel in Frankfurt, Germany.

Lawless would not give company forecasts for 2009, but said there was "close to double digit growth in 2008."

Several other international hotel groups have suspended their projects in Dubai after seeing its economy stall over recent months.

The real estate market has slowed but tourists - for now - appear to still be going, with hotels recording a five percent increase in check-ins in the first three months of this year.

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CD 11 years ago

This article is such a typical display of Jumeirah arrogance. Despite not being their sole market, they have no interest in the residents of Dubai who may be interested in staying at one of their properties if the price was right. They would prefer to be empty!

Homa Farley 11 years ago

I agree with CD. Why do the organizations such as Jumairah Group do not look the the local population for more business and offer reasonable prices to entice us to use their facilities and rooms. It is astonishing the kind of discounts foreign residents receive to come here and yet the residents in the U.A.E. are hardly offered any such promotions. Please remember we are here and will be here much longer then the tourists. We work hard and it would be nice to if we could receive some sort of appreciation from the Hotel owners etc. in the way of special discounts. It is time they wake up and realize that the local market is the one to be concentrating on more than the foreign market.

Carmel 11 years ago

Not very long ago I remember reading an article where the bailout money that the US banks were getting was injected into Dubai. US taxpayers bailing out Dubai. If I remember rightly around $800m from Citibank. I don't get it where does all this money come from when you keep hearing of more and more hotels that are in the pipeline. Am I missing something here ???? We do live on two totally different planets on this one planet called Earth. Lets call them Rich Earth and Poor Earth. But it seems to me Poor Earth is growing very rapidly in size so what happens to Rich Earth when it's size begins to shrink and shrink. The mistake we are making today is underestimating the power of the underpreviliaged. The world is truly beautiful when seen through the eyes of a child not so when seen through seen through the eyes of an adult