Wednesday, July 09, 2008

Dubai hotel occupancy rates

What's that rumble?

Kipp Report
Though nobody dares deviate from the official 'all is well' line, Dubai hotel occupancy is at record lows.
Reliable sources told Kipp Report that average occupancy in city hotels at the end of June was 56%; the swanky new Raffles was struggling thanks to a high-rate, no-beach double whammy at 19%, while the Grand Hyatt was at 40%. The latter denies this figure. It does admit occupancy is a little lower so far this summer, but says the current rate is around 70%. Raffles also denies 19% - it says June closed with 30% occupancy.

Even so, compared to last year, when DTCM claimed record occupancies of 85%, ahead of Hong Kong, Sydney, Tokyo and London and nobody was discounting rooms in Dubai, this year one can walk into most hotels at half price.
General opinion suggests the situation could be a combination of factors, some external - like the globally depressed economic scenario and higher cost of flights thanks to spiralling oil prices - but there is a nagging suspicion the city has been rumbled: strained infrastructure, choked roads, few transport options, ugly cranes and little to do beyond malls.
Via Secret Dubai.

On the same date as the Kipp Report article the AMEInfo "The ultimate Middle East business resource reported
The economic downturn in Europe and the US is having a negative impact on tourism throughout the much of the world, but no such slowdown is occurring in the Middle East, where the tourism industry in the region is expected to keep accelerating over the next few years.
Hotels are reaping a windfall from this growth, as the region now has the highest absolute occupancy and average room rates in the worldm, at 74.3% and $181.

Business travellers are the key drivers of the region's booming hotel business, as more than a quarter of fortune 500 firms now have a base in Dubai, leading to a strong demand for hotel rooms from the corporate sector.

Another factor boosting hotel occupancy rates in Dubai is its emergence as a key player in the meetings, incentives, conference, and exhibitions (MICE) industry, with more than 100 major international exhibitions being held in the emirate.
I wonder where the truth lies. An increase in cut-rate hotel deals tells a story.

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6:26 PM  

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