Abu Dhabi is unlikely to cap room rates during major events this year as new hotels lead to more competitive prices, the emirate's tourism authority says. There has been a shortage of rooms in the capital in the past, which has made it difficult for visitors to secure accommodation during popular conferences and events.
Abu Dhabi is set to gain another 5,000 rooms this year, with a target of increasing guest numbers by 10 per cent from about 1.5 million last year, the Abu Dhabi Tourism Authority (ADTA) said. The emirate is aiming to attract 2.3 million hotel guests a year by 2012. "ADTA expects demand and supply conditions to change throughout the course of 2010 and this will lead to further reductions in room rates," said Nasser al Reyami, the ADTA director of tourism standards. "[This] makes the need for rate caps virtually redundant."
Abu Dhabi has some 17,000 rooms in 111 hotels and hotel apartment businesses. About 4,500 rooms were added to the inventory last year, with half of them opening on Yas Island in time for the Formula One Grand Prix race, including the flagship Yas Hotel that straddles the racetrack. The ADTA imposed caps on hotel room rates last year during major events to prevent prices from reaching unreasonably high levels. They were set according to the hotels' locations and star ratings.
There was an upper ceiling of Dh4,060 (US$1,105) for the Yas Hotel during the GP weekend, for example, while the Emirates Palace was allowed to charge a maximum Dh2,900 a night. Rates were also capped during Gastech, the World Future Energy Summit and the International Defence Exhibition. "Market forces are by themselves producing a more competitive environment, making it easier for major meetings and events producers to satisfy demand from participants and visitors," said Mr al Reyami.
The capital has also moved towards developing more mid-market hotels, with a Holiday Inn, a Park Inn and Rotana's Centro brand opening last year. "This is a much improved scenario since this time last year, when it was genuinely difficult to secure a room in Abu Dhabi," Mr al Reyami said. Occupancy levels and prices in Abu Dhabi have already eased somewhat, partly as a result of new rooms. Occupancy fell 11.3 per cent to 80.1 per cent and average daily rates declined by 3.9 per cent to Dh1,206 in October, STR Global data showed.
The capital still boasts one of the highest average room rates in the world and its number and range of hotels remain relatively small. Hotels expected to open this year in Abu Dhabi include Rotana's alcohol-free Khalidiya Palace Rayhaan and a Rocco Forte Collection hotel. The opening of new hotels was "very healthy" for Abu Dhabi's tourism industry, said Simon Stamper, the area general manager of InterContinental Abu Dhabi and InterContinental Al Ain.
"We are very comfortable with competition [as] InterContinental Abu Dhabi is a well established brand," Mr Stamper said. "ADTA has done and is still doing a great job in promoting Abu Dhabi as a destination. It has created a number of events during the past few years which have attracted travellers from around the world to Abu Dhabi." Planned attractions such as the Ferrari World theme park, scheduled to open this year, and the capital's busy conference schedule are likely to help attract more visitors.
"The changing dynamics presents us with a significant opportunity to advance our leisure tourism proposition by continued and proactive promotion, as leisure visitors are typically more price and value-sensitive than business visitors," said Mr al Reyami. @Email:firstname.lastname@example.org