Fairmont President: Property Slump Dubai’s Biggest Challenge
Thomas Storey, President of Fairmont Hotels and Resorts, said the single biggest challenge facing Dubai’s hospitality industry is the collapse of its real estate industry. Mr. Storey said that when the property boom peaked it was the engine of Dubai’s economy, and hotels depended on customers to fill their rooms. Now that the real estate market has slumped they have few other alternatives.
Mr. Storey explained that much of the business in Dubai was driven by real estate and all of the follow on business associated with that. “When that started dialing back, unfortunately Dubai doesn’t have a lot of other industries to fall back on.” He said that his concern is that Dubai may not have enough “runway” meaning if there is a shock to one business base, other segments would support the economy. Mr. Storey said RevPar at Fairmont Dubai fell 25 percent in 2009. RevPar is the industry benchmark reflecting a hotel’s average daily room rate and occupancy rate.
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