ABU DHABI // The UAE is losing business travellers because the cost of hotels is too high, according to professionals who plan conferences and meetings. "If prices are the determining factor for meetings planners, I don't think there is any doubt that a place with some of the highest prices in the world is deterring business," said Paul Kennedy, the exhibition director of GIBTM, the Gulf Incentive, Business Travel and Meetings Exhibition, which is being held in the capital this week.
Although prices have been lowered in Dubai, which has been affected by both the global financial downturn and the opening of new hotels, in Abu Dhabi both occupancy rates and prices are high. The Abu Dhabi Tourism Authority has acknowledged the need to increase the number of hotel rooms if it is to become a major centre of business travel. There are expected to be 25,000 hotel rooms in the capital by 2012, up from about 13,000 today.
Manish Nimkar, the UAE commercial manager at BCD Travel, a company that arranges events, meetings and incentive travel for corporations, said the country's hotel prices were out of line with normal global rates. One travel agent who declined to be named said companies from the UK and Europe were no longer booking events in the UAE. Instead, he said, they were choosing cheaper locations in Cyprus or Asia.
"You used to be able to pick up a brochure and find several nights in a hotel on the beach for a few hundred dollars," the agent said. "Now, you just can't find that." The demand for rooms has been further exacerbated in the capital by workers who are living in hotel apartments because rental properties are so expensive and difficult to find. Mr Nimkar said: "In Abu Dhabi they have been bringing a lot of people in to work on projects like the Louvre and Saaidiyat Island, for example. They all need hotels and hotel apartments, which is part of the reason why rates are high. There are more long-stay guests."
Mr Kennedy said some delegates were staying in Dubai during the conference because rates were more affordable there. For their part, hoteliers said prices were dictated by the market. "The rates are a result of supply and demand," said Moritz Klein, the general manager of the Beach Rotana hotel in Abu Dhabi. High prices may have been normal last year, he said, but as more hotels open, the rates will start to normalise.
Mohammed Fouad, the group director of sales and marketing at Al Diar Hotels, added: "The entire country is going through a tremendous growth. In Dubai, you've seen hotels catch up to that, but in Abu Dhabi we are still getting all the business. The demand is there." jgerson@thenational.ae
