Dubai is likely to experience a sharp decline in hotel occupancy rates because it depends on European travellers who have been hard hit by the economic slowdown, industry officials said.
Occupancy rates fell for the first time in five years in August, according to a worldwide survey by Smith Travel Research, an industry consultancy.
"Markets like Dubai, which are dependent on a lot of European travellers and have a large number of new hotels, will be hit hardest," said James Chappell, the company's managing director.
The industry has responded to lower occupancy by increasing room rates, which has protected margins in most regions; the US, however, suffered declines in both occupancy and profitability.
"We see a trend of declining occupancies and growing room rates across the world," said Mr Chappell. "While performance in each region is influenced by different factors, the worldwide economic slowdown has started to take its toll on the hospitality industry."
Many hotels in Dubai have yet to witness the decline, but are already reaching out to a more diverse pool of travellers to protect against a downturn in their traditional markets.
"Our occupancy rates are still looking very healthy, but at the same time we know that the market here is not isolated from the rest of the world so that is why we are targeting tourists from more that one country to limit any damage," said Jeff Strachan, the area director of Marriott hotels in the Middle East and North Africa.
The figures from the survey ofmore than 36,150 hotels comprising 4.93 million guest rooms showed that occupancy fell in all four regions in August.
In the Middle East and Africa, occupancy stood at 72.9 per cent, down 0.5 per cent from the same month last year.
The Middle East and Africa region ranked first worldwide in revenue per available room (RevPAR) growth. RevPAR increased 19.4 per cent in August versus 18.4 per cent a year earlier.
The average daily room rate in the region stood at US$144.53 (Dh530.86) and RevPAR was $105.32. The declining occupancy tallied with the latest information on growth in travel bookings in the Middle East, which fell sharply in July and August, according to booking agents.
The Americas witnessed the worst conditions of any region, with RevPAR falling 0.3 per cent in August to $73.74.
Room rates increased three per cent to $108.79 while occupancy declined 3.2 per cent to finish at 67.8 per cent. The Caribbean sub-region, in particular, brought down the figures with an 11 per cent decline in RevPAR.
"We have been lucky that our hotel has been closed for renovations this summer because the occupancy rates we have heard from the market are the worst this year," said a reservations manager at The Sandpiper hotel in Barbados.
Wayne Capalidi, the president of Barbados Hotel and Tourism Association, said that "the worst is still to come" and he expected a slight drop in tourist numbers this year.
"To overcome the problem we are increasing our ad and marketing budget by $5 million to reach $25m," he said, adding that hotels had already started offering visitors value packages and rates. "We don't want to drop the rates too much because the destination will then lose its value," Mr Capalidi said.
Asia Pacific saw the highest growth in room rates and also the steepest decline in occupancy.
In Europe, occupancy fell 5.1 per cent to 68.4 per cent, while room rates rose 5.7 per cent to $153.43, the survey showed.
abakr@thenational.ae
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Studying addiction
This month, Dubai Medical College launched the Middle East’s first master's programme in addiction science.
Together with the Erada Centre for Treatment and Rehabilitation, the college offers a two-year master’s course as well as a one-year diploma in the same subject.
The move was announced earlier this year and is part of a new drive to combat drug abuse and increase the region’s capacity for treating drug addiction.
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Diriyah%20project%20at%20a%20glance
%3Cp%3E-%20Diriyah%E2%80%99s%201.9km%20King%20Salman%20Boulevard%2C%20a%20Parisian%20Champs-Elysees-inspired%20avenue%2C%20is%20scheduled%20for%20completion%20in%202028%0D%3Cbr%3E-%20The%20Royal%20Diriyah%20Opera%20House%20is%20expected%20to%20be%20completed%20in%20four%20years%0D%3Cbr%3E-%20Diriyah%E2%80%99s%20first%20of%2042%20hotels%2C%20the%20Bab%20Samhan%20hotel%2C%20will%20open%20in%20the%20first%20quarter%20of%202024%0D%3Cbr%3E-%20On%20completion%20in%202030%2C%20the%20Diriyah%20project%20is%20forecast%20to%20accommodate%20more%20than%20100%2C000%20people%0D%3Cbr%3E-%20The%20%2463.2%20billion%20Diriyah%20project%20will%20contribute%20%247.2%20billion%20to%20the%20kingdom%E2%80%99s%20GDP%0D%3Cbr%3E-%20It%20will%20create%20more%20than%20178%2C000%20jobs%20and%20aims%20to%20attract%20more%20than%2050%20million%20visits%20a%20year%0D%3Cbr%3E-%20About%202%2C000%20people%20work%20for%20the%20Diriyah%20Company%2C%20with%20more%20than%2086%20per%20cent%20being%20Saudi%20citizens%0D%3C%2Fp%3E%0A