Dubai hoteliers are struggling to fill rooms as occupancy rates hover at their lowest level in four years and are slashing prices to lure visitors.
The industry, along with the property sector, has been hit hard by the change in the emirate's fortunes with declining visitors. But hotel managers say they see business picking up toward the end of this year.
Occupancy rates dropped by 7 percent last year from July to December, a recent report by real estate firm showed. Overall four out of five rooms were booked last year, the lowest level since 2004.
Dubai's Department of Tourism and Commerce, a government agency, has warned it expects 2009 "to be more challenging". In 2008, area hotels received just under 7 million guests, up a mere 0.6 percent compared to 2007. Sales grew 15 percent in 2008 over 2007, when they rose 22.4 percent.
The emirate had 57,000 hotel and apartment-hotel rooms at the end of 2008. Prices for corporate contracts have fallen from 700 to 450 dirhams per night over the past year while tourists, who are making up the shortfall, are paying 50 percent less at 480 dirhams per night.
"A lot of tour operators have come to us and said we've got to be flexible with prices," Pingoy said.
She added the hotels are cutting costs and the sales team are trying to drum up business from across the Gulf.
Research company STR Global said that while occupancy rates are falling across the globe, the daily rate for a room in Middle East and Africa is faring better than in Asia Pacific, Europe and the Americas.
