Hoteliers in Abu Dhabi are concerned about the upcoming summer months amid an increase in the number of properties competing for business in the emirate.
"We're expecting a very, very tough summer - a very competitive summer," said Omer Kaddouri, the chief operating officer at Rotana Hotels. "We know that hotels are going to be reducing their rates drastically. We have already heard of some very low rates at some very top-end hotels for summer."
Average room rates in Abu Dhabi fell by 14 per cent to Dh509 (US$138.63) in the first two months of the year compared with the same period last year, figures from the Abu Dhabi Tourism and Culture Authority show.
"The problem today we have in Abu Dhabi is rates," said Mr Kaddouri. "We feel that's going to be continuing for the next two to three years."
An increase in the number of hotels in the capital has led to a 5 per cent drop in occupancy in the emirate in the first two months of the year, according to data from the tourism authority.
However, the total number of guests staying in Abu Dhabi's hotels was up 5 per cent in February to 184,296 compared with the same month a year earlier.
Fairmont Bab Al Bahrsaid it had not suffered any harm from new supply in the first quarter amid a strong conferences-and-events calendar in the capital.
"Overall, we haven't felt any of the effects of new hotels coming on stream, as average rate is healthy and occupancy levels remain steady," said Arshad Hussain, the director of sales and marketing at the hotel.