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Tue 28 Jul 2009 04:21 PM

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Dubai hotels see biggest losses in the region

Biggest falls in revenue seen by Dubai hotels compared with 22 other Gulf cities.

Dubai hotels saw the biggest falls in revenue in the region in the first half of 2009, according to a survey of key Middle East cities published on Tuesday.

Hotels in 22 cities in the region witnessed an average 10.9 percent decrease in occupancies and a 17.2 percent drop in revenue per available room (RevPAR), an industry benchmark, said a report by US hospitality research firm STR Global and Deloitte & Touche Middle East.

Occupancy rates in Dubai, the region's trade and tourism hub, fell 12.9 percent compared to the year-earlier period, and RevPAR plunged 35 percent.

Dubai, which attracts hundreds of thousands of tourists to its beaches and luxury hotels, predominantly from Europe and Russia, continued to suffer as the global financial crisis bit into the spending power of those countries.

Hotels in Oman's capital Muscat were among those badly hit as they experience "high seasonality in occupancies and revenues". Occupancies were down 21.7 percent and RevPAR 16.6 percent in the first six months of the year.

Lebanon's main tourism destination, Beirut, remained the top performer in the period, as it enjoyed "increased political stability in 2008 and 2009".

Beirut's occupancy levels soared 69.4 percent and RevPAR surged 125.2 percent, due to a significant inflow of tourists, the survey said, adding that it expected the city's hospitality sector to continue growing.

The Saudi Red Sea city of Jeddah followed Beirut in regional gains, as hotels were not "impacted dramatically" by seasonality and the sector enjoyed steady growth.

Jeddah is a local tourism hub and a landing port for Muslim pilgrims en route to Mecca.

Jeddah hotels' RevPAR was 11.5 percent up until the end of June 2009, compared to the same period last year, while occupancy levels stood at 70.4 percent.

UAE capital Abu Dhabi was also among positive performers, seeing RevPAR growth of 3.2 percent in the period.

Occupancies, however, dropped 6.8 percent to 79.2 percent in the first six months. The emirate's monthly occupancies also declined in 2009 compared to 2008, the survey said.

RevPAR for Abu Dhabi hotels in the month of June 2009 decreased by 12.2 percent compared to the same month last year. (Reuters)

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ahmed 11 years ago

now that we know, what is being done to change the situation?nothing..is it rocket science to understand a simple thing?how do you fill hotel rooms?by making travel cheaper...easier...less visa hurdles...less visa expenses...less room rates...or am i missing something here?

Punky Brewster 11 years ago

I think we would be barking up the WRONG tree if we would think the Authorities will REDUCE the Visa charges, esp to boost Tourism! I'm sure Hotels will come up with ways to fill up the coffers, but by sitting and doing nothing much isn't going to help. Infact, it's going to add unemployment to the industry, and as a result, more misery for the economy as a whole! If we really are interested in coming out of this recession, we need to be on our toes, and move fast!

steve 11 years ago

I'm sure we were told that Dubai's hotel occupancy numbers had increased not long ago? I wonder were all these additonal airport traveller's we keep hearing about are staying? mmmm . . .this can't be correct can it, an independant organisation giving facts rather than spin? But being serious why wouldn't you come here on holiday? I mean the room rates are reasonable, the price of a meal is a bargain, and the drink prices are rock bottom, that is if you don't mind paying double the price of anywhere else! As for a holiday shopping destination, don't even get me started. Just another case of rip-off Dubai, not understanding how the market works. Takings are down, I know what I'll do I'll put the prices up to recover my reduced turnover!

Harry 11 years ago

The era of paying by credit card and impulsive travelling is over due to loss of job security and restrictions on lending. People were fooled into thinking they will be richer to-morrow by increase in their property prices or their investment potfolio. Now that the greed of the financial "WhizKids" has finally been exposed. This has made many people to look themselves in the mirror and ask "Am I really that rich as I was promised" Answer is emphatic NO. So every sensible person is spending what they can afford. Even in USA most purchases are being paid in cash and the days of credit card could be numbered.

Saleem Nadeer 11 years ago

Actually I know someone who works in the Dubai Tourist Industry. From what he tells me, even he doesn't quite understand is that there is in fact an increase in visitors, despite the global financial problems. The nicest hotels around Dubai are in fact quite busy. But this being the summer period, some of these hotels especially the exotic ones in the desert have reduced their rates. Emirates flights have actually increased in some sectors of the world. A lot of cheaper flights are being offered, which of course all transit in Dubai, meaning increase of passengers. He also points out that Immigration staff at the airport are unnecessarily being rude to customers and causing unnessary delays and frustration with passengers, and this is on occasion having an impact. Apparantly alot of them have a confrontational and immature attitude towards passengers.

Fadi 11 years ago

I fail to do the math here, how can you have more visas for people who do neither stay at hotels nor rent a flat?

Muhammad Nauman 11 years ago

One significant reason in decrese in revenue per available room for hotels is the increase in number of new hotels and resorts as compared to last year. Despite the fact that number of tourists has increased as per airport records, due to the increase in number of rooms, the average revenue decreases. The article is not comparing the total revenue of hotels of current year with that of last year.

Omar 11 years ago

Enough greed. Enough!Where is the world heading to?Dubai can NOT have hotel rates higher than Tokyo. Intercontinental Festival City can NOT be more expensive than Intercontinental ANA- Opposite Tokyo Tower!!!That's insane and doe snot make any sense. One lady called me last Wed. offering me a corporate rate of AED 1,150!That's 310$$ higher than Intercontinental ANA Tokyo where i paid 248$$!!Give me a break please with your prices. I am a great believer in Dubai as second to none in the entire MEASA region but Dubai has NOT reached yet the level of Tokyo, LA, London so give us a break and reduce your prices more so you get more business. Enough greed.