x Abu Dhabi, UAETuesday 23 January 2018

Price cuts boost Dubai tourism

Deep price cuts helped to lure more guests to Dubai's hotels last month and contributed to a sharp increase in occupancy compared with February last year.

A price-cutting strategy by Dubai hotels has successfully boosted occupancy levels.
A price-cutting strategy by Dubai hotels has successfully boosted occupancy levels.

Deep price cuts helped to lure more guests to Dubai's hotels last month and contributed to a sharp increase in occupancy compared with February last year. Occupancy levels in the emirate increased to 86 per cent last month from 74 per cent in February last year, the latest data from STR Global, a research company based in London, showed.

Room rates fell 13.9 per cent to US$186.54 (Dh685.19), from $216.71, according to the research. But the boost in the number of guests meant that revenue per available room, a key indicator of the health of the industry that factors in both occupancy levels and room rates, was flat. Hoteliers said the industry had worked hard to attract more tourists. "We had to go out and fight for business," said Mustafa Ainen, the general manager of the Media Rotana hotel in Dubai.

"When you have a situation like this, you do not leave a stone unturned. "You have to look for opportunities you might not have looked at in the past because the business was there." The Rotana opened in November 2008, at the start of the economic crisis, and faced several difficult months. But, Dubai was now becoming much more attractive to a wider range of travellers, as air fares and hotels had become cheaper, Mr Ainen said.

"Travelling to Dubai definitely is more affordable than a couple of years ago," he said. "We are hopeful that with the prevailing rates now, Dubai will remain competitive and attractive so we can [raise the] volume of business travellers and leisure travellers to fill all these rooms that are opening." Analysts said hotels in Dubai were benefiting from the fact that it was the high season for tourism.

Last month, the Dubai Shopping Festival, the GCC holidays and exhibitions such as Gulfood helped attract visitors. However, in Abu Dhabi, hotels are suffering following the addition of several new hotels in recent months. This competition for business has resulted in an increase in the number of empty rooms, which has forced hotels to slash rates. Some new hotels in Abu Dhabi have occupancy rates as low as 20 per cent, sources said.

The data from STR Global showed a 31.2 per cent decline in occupancy levels to 58.9 per cent last month, while average daily rates dropped 39.9 per cent to $233.03, and revenue per available room fell 58.7 per cent to $137.28. The Abu Dhabi Tourism Authority has said these declines were part of the process of building a tourism destination. Abu Dhabi is aiming to attract 2.3 million hotel guests by 2012, up from about 1.5 million last year.

rbundhun@thenational.ae