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Fri 5 Dec 2008 07:49 AM

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UAE urged to offer value holidays amid cash crisis

Latest research predicts downturn in tourism volume, as cost of holiday rises by 25%.

The UAE is about to see a downturn in holiday visitors due to the global economic crisis, industry experts have predicted, and tourism chiefs need to look at developing their value-for-money offerings.

Analysis presented by Deloitte to hospitality leaders in the Middle East suggests that despite tourist arrival and hotel performance growth up until September, tourism volume in the UAE will slow due to the current economic conditions facing the important European outbound market.

The latest research by Deloitte said Europeans had seen a decline in the value of their investments and real estate and, combined with the unfavourable exchange rates with the dirham, the cost of visiting the emirates had risen by at least 25 percent.

The company said the UAE faced a challenging time in maintaining the growth enjoyed over the past three years.

Alex Kyriakidis, global managing partner of Tourism, Hospitality and Leisure at Deloitte said: “The long-term development vision of the UAE must continue and current conditions should not cause panic.

"No one is immune from the global economic crisis. The key is in broadening the UAE tourism offering to meet the needs of today’s tourists.

"There will be increased emphasis on value for money and the UAE will be competing for the European visitors – who account for over 40 percent of tourists – with Egypt, Turkey and the Far East as destinations which have not been affected by the strengthening of the dollar."

He added: "The mid and limited service market is currently an underdeveloped sector in the UAE’s hotel supply and should be addressed promptly. Hoteliers should also look to different sales channels such as tour operators to broaden the distribution base.”

He said: “Another way of introducing more tourists to the emirates is to continue developing a diverse range of attractions such as theme parks, cultural attractions, museums and nature reserves to widen the appeal to different types of tourists such as families.”

Rob O’Hanlon, tourism, hotel and leisure partner at Deloitte Middle East, added: “Hotel performance remains very strong in Abu Dhabi with revenue per available room (revPAR) up 45 percent while Dubai’s revPAR grew 6.7 percent year-to-October 2008.

"To ensure that hotel performance remains solid, an increased marketing effort for the UAE as a whole is important. The other part of the puzzle is to align this strategy with the route expansion plans of Emirates and Etihad airlines, key drivers of the UAE’s tourism traffic.”

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JohnB 11 years ago

Worrying. More scrabbling after money, it's never ending. Dubai is already losing its reputation as an exclusive holiday destination, as tourist companies and hotel owners are allowed to chase the almighty Dollar unfettered. Prepare for a lot more drunken fighting in nightclubs, and general bad behaviour as Waynes and Waynettas from Basildon arrive by the planeload.

michaelb 11 years ago

it will be bargain prices, from what I hear, bookings are severely down for 2009 thus far. Expect prices to plummet below 1000 DHS at 5 star hotels, bargain prices in such times though will not exactly bring in the "premium tourists" that Dubai had originally envisioned. This will be a blow to the luxury retail market... namely the Cartiers and Chanels of Dubai's malls.

Doug 11 years ago

Why on earth would you spend 7 hours on a plane, pay for a rip-off hotel and arrive in a destination with nothing but overpriced, poorly stocked shopping malls and useless taxi drivers and expensive drinks, when you could fly to Tenerife in 2 hours and spend less than 2000Dhs on an all-inclusive break? It's a no-brainer.