Hotel room rates in Dubai are unlikely to improve until the end of 2011 or even 2012, experts commented on Sunday.
Julian Kemp said globally rates would remain deflated in 2010 but a recovery in Dubai might take longer because the emirate was dependent on leisure markets improving.
"Leisure travel may take longer to improve and therefore leisure sector rates may remain depressed...with a large proportion of demand for Dubai hotel rooms generated from the leisure sector, rate improvement may take longer toward the end of 2011 and beginning of 2012," Kemp added in a statement.
Looking at prospects for 2010, Kemp said the general consensus among the industry is that "trading will be tough".
"UK is one of the prime sources of demand for Dubai and with a high degree of uncertainty in respect of the economy for this year, travel for both leisure and business is likely to remain depressed," he said.
"As such, the immediate impact to hotels will be a loss in occupancy levels which in turn leads to a drop in roomrates. As a result, in our opinion the average room rate (ARR) is likely to decrease further or at best remain in line with results achieved in 2009."
He said he was still concerned about the continuing development of hotels within the emirate, with the increased number of rooms putting further pressure on hotels to achieve reasonable occupancy levels.
He said figures released by hotels research firm STR Global showed Dubai experienced a drop of 10.2 percent in occupancy levels from 77.2 percent in 2008 to 69.4 percent in 2009.
"Compared to other global cities the percentage drop is higher than experienced by most European, North American and Asia Pacific destinations," Kemp said, adding that some of this decline was due to the continuing development and opening of new rooms through the year in Dubai.
Cities within the wider Middle East region, based on STR Global data, have had a mixed reaction to the current global economic environment but Dubai has been affected the most, with ARR down 26 percent to October 2009.
The UAE saw ARR decrease by 10.4 percent year to date October 2009 versus the same period in 2008.
