Hotels in Dubai, the Gulf's leisure and tourism hub, are unlikely to see a fast recovery in revenue and occupancy in 2010 because of an oversupply and weak demand during tough economic times, a leading hotelier said.
According to hospitality research firm STR Global, revenue per available room (RevPar), a key measure of hotel performance, for Dubai hotels fell 35.3 percent to $198.2 in October from the year-ago period.
Weak travel demand and an oversupply of hotel rooms have contributed to lower levels of occupancy and average room rates in the city.
It is estimated that the current average for hotel occupancy in the city to be close to 50 percent, saying December is a slow month for business.
A rash of hotel developments were announced during Dubai's economic boom years before the global economic crisis last year led to cancellations and delays as banks put the brakes on their lending spree.
There is a marked slowdown in hotel construction and openings as there's no bank lending money to the builders. But the city's hotel supply is increasing with properties that were in advanced stages of construction opening even during a period of slowdown.
The Dubai hospitality market has "reached a limit" for new hotels and what is needed now is to "sit back and consolidate."
Dubai, a city of 1.6 million, has some 60,000 hotel rooms offering budget stays to extravagantly luxurious rooms.
