Dubai Hotel Revenue Fell 
35 Per Cent in February

DUBAI - Dubai hotels are seeing weaker revenues year as fewer visitors and an increase in the number of hotels opening their doors weigh on the emirate’s once-booming tourism sector, consultants said on Wednesday.

By (Reuters)

Published: Thu 23 Apr 2009, 10:56 PM

Last updated: Thu 2 Apr 2015, 3:41 AM

Revenue per available room, an industry benchmark, for Dubai hotels dropped 35 per cent to $217.5 in February from $333.5 a year earlier, according to the STR Global Hotel Survey carried out with consultancy firm Deloitte & Touche.

Dubai gets 19 per cent of gross domestic product from tourism and its economy stands to suffer as fewer people holiday during the global economic crisis and retail sales and trade flows decline.

Dubai sparked a construction boom when it first allowed foreigners to buy property in 2002. Luxury resorts, hotels, serviced apartments and holiday villas mushroomed, leading to 6.95 million tourists in 2007. Many of those planned hotels and apartments are opening their doors now as economic growth slows.

“There were so many properties coming on board even if the general slowdown hadn’t been so strong ... you can’t do that forever,” Robert O’Hanlon, tourism, hospitality and leisure partner at Deloitte Middle East told Reuters.

Arthur de Haast, chief executive of Jones Lang LaSalle’s hotel unit told Reuters that oversupply and falling demand was likely to weaken hotel performance this year.

“Overall the performance of hotels will decline in 2009 and will probably at best stabilise in 2010 and we won’t see recovery in growth until probably 2011,” said de Haast.

The emirate’s annual shopping festival, first held in 1996 and which draws tourists from around the world with a month of discounts, had its budget cut this year and shifted focus towards attracting visitors from neighbouring Arab countries and India and away from recession-hit Europe, organisers said.

Statistics from Dubai’s international airport show passenger traffic still rising — by 2 per cent in the first quarter to about 9.5 million.

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