Drop in RevPAR expected this year
May 20 - There may be a drop in hotel rates this year as almost 200,000 will be ready soon, said Khalid bin Sulayem, Director-General of the Dubai Tourism and Commerce Marketing (DTCM) at The Hotel Show that began on Tuesday in Dubai. "There are between 16,000 and 20,000 hotel rooms ready to enter the Dubai market by the end of the year, which will contribute to producing lower room rates and attracting more visitors to the emirate,” he said.
According to a recent study by Proleads, a Dubai-based research company, there are currently more than 470 active hotel projects in the GCC alone, with the UAE accounting for the bulk of it with 258 properties. "Originally, when these projects were conceived, the regional hospitality industry was booming. The projects were being built to satisfy future demand," said Ray Tinston, Sales Director, The Hotel Show. "However, with the global economic downturn still clearly evident and further worries about a double-dip recession, hotel owners and operators are now looking at the situation philosophically. If the region is to compete globally RevPAR rates need to be competitive. That could still benefit hotel revenues. By increasing occupancies at slightly lower rates, operators can still capitalise on the peripheral food and beverage spend," said Tinston.
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