Dubai hotels reap rewards of tourism boom, increase rates

Hotels in Dubai are lapping up the rewards of a tourism boom during the Spring months, where good weather and an annual shopping festival have attracted flocks of visitors to the Emirate. In the first ten days of 2012, the Rotana Hotels enterprise in the United Arab Emirates recorded occupancies at 90-100 percent “all the days,” Naeem Darkazally, the vice president of sales and revenue at Rotana Hotels told The National. “January in general, I can’t believe what’s happening. It is really outstanding. We traditionally have a dip in our traditional source markets that are not leisure-oriented in the first ten days of January,” Darkazally added. Dubai, a tourism and infrastructure hub, boasts extrovert skyscrapers for hotels, but reports suggest that the high tourism influx has come at a price for customers. Rotana’s revenue per available room, an industry indicator calculated using occupancy levels and room rates, is up 20 percent year-on-year, according to Darkazally. “As long as the demand is there, rates will be adjusted upwards,” Chiheb ben Mahmoud, the head of hotel advisory at Jones Lang LaSalle Hotels Middle East and Africa told the newspaper. “The performance has been improving. The end of the year period was good. Now we are seeing the main attributes of Dubai in full motion.” Dubai’s hotels had reported strong growth in Average Room Rate during the month of November 2011, surging to $265.5, up 19 percent over the same period last year, according to TRI Hospitality Consulting. “The continued strong recovery in occupancy, rate and operating profit levels show why Dubai is still one of the prime destinations for hotel operators and investors,” said Peter Goddard, managing director of the consultancy. Many Middle East economies have faced a testing time in the face of the Arab uprisings which erupted throughout 2011, but countries which have not experienced political unrest, like the United Arab Emirates, have blossomed under the circumstances. “While everyone agrees that hotels in UAE have benefited from the Arab Spring, industry reports also show that there has been a general improvement in corporate activity in the recent months which we believe has contributed to the overall performance,” said Goddard. Shopping fest Meanwhile in Dubai, the annual Shopping Festival in January, which began last Thursday, has been a yearly economic nudge in the right direction. And this time it has begun two weeks earlier than last year’s event. Placed right at the start of the year, post the New Year and seasonal holidays around the world, the Shopping Festival attracts another wave of commercialism. It is forecasted to boost Dubai’s economy by more than $4.08 billion over its four weeks in extra spending on retail, travel and hospitality. “I think the festival keeps Dubai on the map … [It] impacts the whole city, not just the hotel occupancies,” said Darkazally.