Guest numbers rise in Dubai

Dubai hotels had an almost 5 per cent increase in guest numbers for the first half of the year, despite falls in revenues.

The number of guests staying at Dubai hotels increased 5 per cent during the first part of the year.

Dubai hotels had an almost 5 per cent increase in guest numbers for the first half of the year, data from the Dubai Department of Tourism and Commerce Marketing (DTCM) released yesterday showed. That was despite falls in occupancy levels and revenues due to a global slowdown in tourism and an increase in the number of hotels in the emirate. Guest numbers increased to 3.85 million in the first half of this year from 3.68 million in the same period last year.

"The growth trends witnessed in various segments have helped Dubai maintain its solid standing on the world tourism map in one of the most challenging business environments that the global tourism industry is grappling with," said Khalid bin Sulayem, the director general of the DTCM. "The DTCM's promotions and marketing initiatives, taken up in co-operation with the hoteliers and tourism industry professionals, contributed enormously in achieving the high growth and keeping the tourism economy robust."

Hotels in Dubai have slashed rates, offered free rooms to children and thrown in free extras to try to maintain occupancy levels. As a result of rate cuts and new hotels opening for business, Dubai's revenue per available room (REVPAR) - the key industry indicator to track the health of hotels - slumped by 36 per cent in the first half of the year, while occupancy levels were down to 69.9 per cent from 82.7 per cent in the same period last year, according to STR Global.

The tourism industry contributed 19 per cent directly to Dubai's GDP last year, and 32 per cent indirectly, according to the DTCM, which is aiming to attract 15 million visitors to the emirate by 2015. Dubai now has 58,147 rooms - 40,943 hotel rooms and 17,204 hotel apartment rooms - representing a 17 per cent rise on last year, the DTCM said. Thousands more rooms are set to open over the next year.

The DTCM did not disclose hotel revenues for the first half of the year, but preliminary data for the first quarter showed revenues fell by 14 per cent compared with the same period last year. The same data showed that guests were staying fewer nights, despite the 5 per cent rise in guest numbers. DTCM figures also showed that Dubai's five-star beach hotels were reaping the benefits of aggressive discounting, as they experienced an average occupancy of 90 per cent in the first week of this month.

Atlantis has been offering a summer promotional room rate of Dh800 (US$217) a night, which includes free unlimited access to its Aquaventure waterpark. But as leisure and business travellers take advantage of the cut-rate prices at the beach hotels, many of Dubai's city hotels have suffered poor occupancy percentages, some down in the low 30s, according to Alex Kyriakidis, the global managing partner at Deloitte Tourism, Hospitality and Leisure.

Another trend identified by the DTCM was a 35 per cent rise in GCC guest numbers last month across three, four and five-star hotels in Dubai, compared with July last year. It also said summer promotions such as Kids Go Free had helped boost regional travel. The DTCM and a number of Dubai hotels have tried to tap into the GCC market after a drop in demand from key source markets such as the UK. "I would say that the majority of our clients that own hotels in a good location and are managed by a good operator have seen occupancy rates higher than 80 per cent, even with the current conditions and the summer season," said Amine Hamdani, the vice president at CB Richard Ellis Hotels Middle East.

"We can still say that the hospitality industry in Dubai is based on strong fundamentals and demand is still there, even if the European number of tourists may drop." [e-mail]