UAE hotel room rates will probably never return to the peak they reached during the country's five year boom, said Kurt Ritter, CEO of a leading hotel chain in Dubai.
Kurt Ritter told Arabian Business that it would be "wishful thinking" on hoteliers' behalf if rates ever increased to the heights they reached back in 2008.
"To go back to what it was [would be] wishful thinking," he said. "To get rates back up is very tedious and takes a long time; you have to build it up. Once people get used to the rate they don't want to pay any more."
Ritter said the group had been forced to drop its rates by an average of 20 percent since the downturn.
In October last year, Dubai's revenue per available room (RevPAR - the hospitality industry's benchmarking term) reached a record high of $350, according to STR Global.
Ritter said RevPAR had dropped 35 percent in Dubai amid the global economic downturn. Despite the decline, he said the region had fared better than the group's other core markets: "It's still a very good RevPAR rate compared to any place in Europe or across the world."
Many western hotels chains are eying expansion across the MENA region in a bid to recoup losses from their home markets which have been hit badly by the economic downturn.
Ritter said he sees huge potential for the group's three star branded hotels to grow in the region. "Absolutely [there is room for midmarket hotel growth]. It will come; it's just a matter of time. It will follow Europe like Europe followed the US. He also said that "Unbranded hotels will become branded. You can really see in downturns that the unbranded ones suffer more than branded ones."
