The global slowdown and the rise in the number of new hotels in Dubai have forced many properties in the emirate to offer big discounts and unique promotions to attract guests during the summer. A new report says that the hotel industry in Dubai is continuing to witness declines in occupancy levels and revenue per available room (RevPAR) mainly due to a drop in business travel and international tourist arrivals.
Occupancy levels in the emirate in the first five months of the year fell by 13.1%, the report said, while RevPar declined sharply by 35.3% when compared to the same period in 2008.
The steep drop in RevPAR is due to the fact that many hotels have been forced to reduce room rates to attract guests, said Rob O'Hanlon.
'In Dubai, new supply continues to come online at the same time that the market is seeing a slowdown in demand, so you've got a double hit there,' he said.
'A year ago hotels were in a particularly dynamic situation where there was high demand and tight supply, but the overheating of demand is over and as a result I would suggest that room rates are normalizing,' he told AME Info.
New offers
To meet this new challenge hotels in the emirate are taking a variety of approaches to attract guests. 'On one hand we are seeing new properties coming into the market and trying to get their message out there, and one of the tools they are using is deep discounting,' he said.
'Meanwhile, some of the more established properties have been able to leverage the track record they have built up with their clientele and the value of their international brand to try and hold their rate, and deliver value in other ways, such as additional nights free and other add-ons.'
Looking ahead, the hotels that face the most difficult hurdles are the unbranded local properties, he predicted, because gone are the days when supply was tight and guests came looking for you. 'It's easy to make money in good times, but now you will really see the value of good brands and good management,' O'Hanlon said.
Name your price
More than 70 hotels in the emirate are taking part in a 'kids go free' initiative that was launched for the summer season by Dubai's Department of Tourism and Commerce Marketing. The offer, which is being promoted across the globe, includes free accommodation, meals and entry to attractions for one child under 16 who is accompanied by two adults.
Year-on-year discounts
At the same time, some of the most high-profile (and high-priced) hotels in the emirate are offering steep discounts to lure guests.Cut rate deals are also being offered by slashing rates to as low $218 per night for the summer, which is less than half of the normal value.
