Dubai Hotels in price war

Dubai hoteliers sharply reduced room rates by as much as half in December as occupancy levels slump by 25 per cent.

Dubai hoteliers are waging a price war, with room rates cut by as much as half as they try to lure tourists hit by the global financial crisis. The recession in Europe, Dubai's largest tourist source market, has caused a sharp drop in visitor levels, with occupancy rates down 25 per cent on those enjoyed at the same time last year. "We are entering a price war as most hotels in Dubai are cutting their rates," said Amine Moukarzel, the senior vice president and managing director of the Dutch-Swiss Golden Tulip group. Golden Tulip is one of the biggest mid-range hotel chains in the Middle East, with 41 outlets. It operates 11 UAE hotels in Dubai, Abu Dhabi and Sharjah. "The situation is very dire indeed and I believe that all hotels in Dubai are experiencing much lower rates than last year because people right now are really starting to cut down on travel budgets," Mr Moukarzel said. Many hotels in Dubai have seen occupancy rates drop to between 60 per cent and 70 per cent from the 80 per cent and 90 per cent levels in the same period last year, according to Habib Khan, the chief executive of Planet Group, which owns and manages three mid-range hotels in Dubai. Hilton hotels have slashed their prices by up to 50 per cent on weekend breaks for bookings made before the end of August this year. The offer would be valid in 220 hotels - Hilton, Conrad Hotels and Resorts, The Waldorf-Astoria Collection, Doubletree by Hilton and Hilton Garden Inn - across 45 countries including the Middle East, the company said. Hilton Dubai Creek, known for its Gordon Ramsay Verre restaurant, is offering rooms at a starting rate of Dh530 (US$144) compared with Dh1,944 last year, while Hilton Al Ain is promoting rates from Dh435, down from Dh870. Even in Ras al Khaimah, weekend rates at the Hilton have dropped to Dh460 from the Dh920 being charged at this time last year. To address falling occupancy rates, the recently opened Atlantis in Dubai has refused to allow guests to book for less than seven nights during the holiday period. So far, no official data on tourist numbers have been released by Dubai's Department of Tourism and Commerce Marketing (DTCM) for the final quarter of last year. A spokesman said the report would be published in the next few days. With plans to double the number of tourists to 15 million annually by 2015, the DTCM announced a plan last week that aims to boost visitor numbers early this year. "The DTCM will launch a new marketing campaign aimed at increasing the number of tourists and visitors during the Dubai Shopping Festival [which starts on Jan 10] till mid-February," said a DTCM spokesman. The plan includes deeper discounts on room rates, ranging from 40 per cent to 60 per cent, in addition to a 25 per cent discount on the prices of food and beverages. Khalid Ahmed bin Sulayem, the director general of DTCM, said the campaign was part of an effort to sustain tourist attractions throughout the year. The campaign will use the internet, press and industry promotions to cover the UK, Germany, GCC states, India, China, Japan and Australia. "It is no surprise hoteliers are expecting a tough year ahead but I think that we can overcome these challenges by offering attractive discounts and deals," said Eyad Abdul Rahman, the executive director of media relations and acting director of business development at the DTCM. "We have no plans to revise our tourism targets, so to put it simply we will achieve the goals that we have set out." [e-mail]