x Abu Dhabi, UAEMonday 22 January 2018

Dubai's 2008 hotel revenues hit record high

Despite the economic crisis, overall hotel revenues achieved double-digit growth.

Guests at the observation window of the aquarium at the Atlantis: hotels enjoyed their best year ever in 2008.
Guests at the observation window of the aquarium at the Atlantis: hotels enjoyed their best year ever in 2008.

A rise in the number of rooms helped push hotel revenues in Dubai to a record high of Dh15.25 billion (US$4.15bn) last year, the emirate's tourism authority said. Despite the economic crisis, which slowed the industry in the past two months of the year, overall hotel revenues achieved double-digit growth. "The results are highly encouraging and reflect the vibrancy and dynamism of the emirate's expanding tourism industry," said Khalid bin Sulayem, the director general of Dubai's Department of Tourism and Commerce Marketing (DTCM). "The performance reflects the efforts and ability of Dubai in confidently navigating through one of the most difficult journeys the global tourism industry is faced with." The number of hotel rooms and hotel apartments reached 49,598 last year, a 15.9 per cent increase on 2007, the DTCM said. A number of hoteliers in Dubai believe added capacity was the main reason behind the surge in revenues. "The extra supply means that Dubai was ready to accommodate more guests and that's what really boosted revenues last year," said Habib Khan, the chief executive of Planet Group, which owns and manages three mid-range hotels in Dubai. Last year, Dubai hotels received 6,996,449 guests compared with 6,951,798 a year earlier, the DTCM said. "Since there was no major increase in the number of guests, I think the main reason behind the growth in revenues was because room rates were at their height during this time," said Roland Obermeier, the vice president of Kempinski Hotels in the Middle East. "I have been here for almost 10 years and I think 2008 was the best year ever for hotels, despite the slowdown in the last couple of months." Jeff Strachan, the area director for Marriott Hotels and Resorts in the Middle East, agreed. "Last year was everything that Dubai was hoping to achieve and it was really the peak for hotels in terms of room rates and occupancy levels." Hoteliers in the industry have already waged a price war by cutting rates as much as 60 per cent, leading to a 26 per cent drop in margins in December compared with a year earlier, according to the US-based travel research firm, STR Global. "Things don't look too good this year because we cannot keep our rates up any more," Mr Khan said. "So I expect that in 2009 the overall revenues for hotels will be much lower than last year." With a target to double the number of tourists to 15 million by 2015, the DTCM has recently launched a number of initiatives to keep the Dh57bn industry afloat in the crisis. Among them were promotional campaigns launched at the Dubai Shopping Festival, which encouraged hotels to cut room rates from 40 to 60 per cent. And last week, DTCM launched a three-month familiarisation programme dubbed "Keep Discovering Dubai", which will bring 2,000 tour operators and members of the media to the emirate. It is hoping to dispel negative perceptions of Dubai by giving industry insiders a first-hand experience. "We see the year 2009 to be more challenging in consolidating the growth," said Mr bin Sulayem. "[But] Dubai's tourism product offering is going from strength to strength, thanks to the diversity of its activities and accommodation offerings. "The future is looking equally exciting and we are confident about gaining even more solid ground on the world tourism map." abakr@thenational.ae