Capital reconsiders hotel rate caps

Abu Dhabi is unlikely to cap hotel room rates during major events this year, as new openings force hotels to become much more competitive with their prices, the emirate's tourism authority says. "Market forces are by themselves producing a more competitive environment making it easier for major meetings and events producers to satisfy demand from participants and visitors," said Nasser al Reyami, the director of tourism standards at the Abu Dhabi Tourism Authority (ADTA). Abu Dhabi now has some 17,000 rooms in 111 hotel and hotel apartments. Last year, 4,500 rooms were added to the inventory, with around half of these opening on Yas Island in time for the Formula One Grand Prix. Last year, the ADTA imposed caps on hotel room rates during events such as the Grand Prix to prevent prices reaching unreasonably high levels. But, with Abu Dhabi set to gain another 5,000 rooms this year, the ADTA thinks such measures are likely to be unnecessary. "This is a much improved scenario since this time last year when it was genuinely difficult to secure a room in Abu Dhabi," said Mr al Reyami. "This new hospitality landscape has changed the entire demand/supply equation and competition is increasing with the obvious impact on rate structures. These make the need for rate caps virtually redundant." [e-mail]