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Sat 2 May 2009 11:36 PM

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Saudi and Abu Dhabi hotels defy downturn

Deloitte report says occupancy rates and revenues rise in Q1, defying slump elsewhere in ME.

Hotels in Saudi Arabia and Abu Dhabi bucked the global economic downturn in the first quarter, seeing gains in both occupancy rates and revenues, business advisory firm Deloitte said on Saturday.

Mecca and Jeddah saw RevPAR (revenue per available room) increase more than 30 percent, Deloitte said, while Abu Dhabi took top spot in the Middle East in terms of occupancy, average room rates and RevPAR. But the report, quoted Zawya Dow Jones, said hotel occupancy in the Middle East fell 9 percent in the first quarter, while RevPAR dropped 12 percent to $142 compared to the corresponding quarter a year earlier.

"It's clear that the economic situation has deteriorated and consumer and business spending is in sharp decline, with less spend available for travel," said Alex Kyriakidis, global managing partner of tourism, hospitality & leisure at Deloitte.

"As a result, tourism's contribution to gross domestic product is expected to contract by 3.6 percent this year according to the World Travel and Tourism Council," he said.

Last week, real-estate consultancy firm Jones Lang LaSalle said Abu Dhabi and Riyadh were among the region's top performers with average revenue per room in the first quarter rising $48 to $290 and $15 to $194 respectively compared to 2008.

However, Dubai, which has been hit hard by simultaneous falls in its real-estate, financial services, and tourism industries, is pulling down the regional average. The sheikdom "is experiencing an increase in supply when demand from source markets in recession has decreased," Deloitte said.

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