Dubai hotel rates on the increase

Dubai's hotels increased their rates by up to 20 per cent in the first quarter of this year as properties capitalised on the peak season and continued to benefit from the Arab Spring.

A total of 9.3 million tourists visted Dubai last year, with the number of hotel guests rising by 10 per cent compared with the previous year. Jeffrey E Biteng / The National

Dubai's hotels increased their rates by up to 20 per cent in the first quarter of this year as properties capitalised on the peak season and Arab Spring unrest continues to benefit the emirate more than one year on.

"The first quarter was really amazing," said Wael El Behi, the executive assistant manager at the Ramada Downtown Dubai hotel.

Occupancy at the hotel near the Burj Khalifa increased to 93 per cent in the first quarter from 73 per cent in the same period last year, he said.

Average rates at the hotel were up by 12 per cent, he added.

"We are getting to the end of the tunnel now when it comes to recession and this mood of economic crisis," he said.

The global economic downturn hit Dubai's hotels hard in 2009, with properties slashing rates from their peak levels. But sustained growth in demand has given hoteliers the confidence to start raising their prices.

Habib Khan, the general manager of the Arabian Courtyard hotel, said the Courtyard's rates had increased by between 15 and 20 per cent in the first quarter compared with the same period last year.

"We weren't expecting such a diversion of business last year, so the rate was already floated in the market and you couldn't simply not honour the rate that had been floated," Mr Khan said. "We saw that the last quarter of 2011 was quite promising, so it gave us the confidence to realign our rate policy. The demand for Dubai has increased and more people are travelling to Dubai, so we can realign our selling strategies."

The outlook is positive for the coming months, too, Mr Khan said. "April is very promising and we are already sold out on certain days."

For last year, Dubai reported an increase of 10 per cent in the number of hotel guests in the emirate over the previous year, with a total of 9.3 million, according to figures from the Dubai Department of Tourism and Commerce Marketing. The average length of stay rose 12 per cent to 3.6 days, while revenue grew by 20 per cent last year to Dh16 billion (US$4.35bn). This was helped by sharp growth in the number of tourists from countries including Saudi Arabia, China and India.

"I think it is pretty much a similar scenario in the whole Dubai market," said Mr El Behi. "What is happening still, it is not stable in some other Arab countries, so this is pushing some GCC tourists to Dubai. In general in Dubai, the first quarter and the last quarter are the best.

"The nationality mix has improved as well. We have business from South America now with the direct connectivity of Emirates [Airline] to Buenos Aires. Europe is coming back, the Far East, and the Asian subcontinent. It's more because Dubai is established, Dubai has a lot of events, the connection of Emirates, the weather conditions are amazing. A lot of factors have contributed to this result. It cannot only be because of [the Arab Spring]. Six months back, we were a bit concerned about the increase in room inventory in the city … but Dubai has established itself as a tourist destination and that is the reality."

The first quarter of the year is part of the peak season for tourism in the emirate, with an array of major events including the Dubai World Cup horse race and conferences such as Arab Health attracting visitors.

Rotana has also increased rates and is enjoying higher occupancy levels in its Dubai hotels.

"The dynamic in Dubai today is very strong - business in Dubai is great," said Omer Kaddouri, the chief operating officer at Rotana Hotels. "The rates are starting to come up again - not the crazy rates that we used to have, but the sustainable rates that we needed to have."