The festive season may not feel so merry for the hotel sector.
A variety of global factors are likely to result in a softening of the market, with occupancy set to fall under 80 per cent in Dubai, according to analysts.
The economies of the Arabian Gulf states, traditionally a strong market for the holiday season, have been hit by declining oil prices, which fell to an 11-year low last week.
The London-based hotel industry watcher E-Forecasting expects hotel occupancy levels in December across the UAE to fall to 79.5 per cent from 82.3 per cent in December last year.
“There has been a slowdown in economic activity in the major countries that feed Dubai’s hotels, which of course has a domino effect,” said Maria Sogard, the chief executive of E-Forecasting.
The regional sentiment is being compounded by global terrorism concerns, which have heightened in Europe, contributing to anxiety over travel to the Middle East.
The most recent ones involved an Air France plane making an emergency landing in Kenya last Saturday over a suspicious object found in the toilet, while an explosion at Istanbul’s Sabiha Gökçen airport killed one person and damaged several aircraft.
“I think there will be a drop in occupancy over the Christmas period,” said Peter Goddard, the managing director of TRI Hospitality Consulting in Dubai.
“The low oil price is slowing the regional traffic, and the recent terror alerts combined with the migrant crisis in Europe have raised anxiety over travel. Dubai will see the main effects, but Abu Dhabi as a business centre will see a drop because of the holiday period.”
He said that some hotels in the capital were offering rooms for Dh500 a night with a Dh500 in food and beverage voucher as a sweetener, looking to bring footfall.
Hotel operators, however, seem to differ in their outlooks.
Vivek Suri, the marketing and communications manager for the Dusit Thani hotel in Abu Dhabi, said the hotel anticipated a strong pick-up in business throughout the festive month on account of “double celebrations falling on December 24 and 25, both being public holidays. This coupled with the concurrent year-end school holidays further fosters our business prospects.”
ascott@thenational.ae
