Arabian Gulf tourists and UAE residents are expected to fill hotel rooms in Abu Dhabi and Dubai during the Eid Al Fitr weekend as a slow economy and rising cost of living take a hit on spending.
“The demand in Dubai and Abu Dhabi is likely to be dominated by tourists from neighbouring countries such as Saudi Arabia, Qatar and Kuwait,” said Rashid Aboobacker, the associate director at TRI Consulting, a leisure consultancy in Dubai. “We believe that the room rates and revenue are likely to be slightly lower than last year [during the Eid weekend in the UAE].”
The number of hotel guests this season is expected to remain similar to last year because of the sluggish demand and the rise in competition from cheaper destinations such as southern and eastern Europe that are wooing Arabian Gulf tourists, he said.
In Abu Dhabi, where room rates have stabilised this year, the average room at four- and five-star hotels was US$132.59 last month, a drop of 1.9 per cent compared to same period last year, according to Hotstats. The average occupancy rate was 74.7 per cent, a drop of 1.4 per cent.
At the five-star Dusit Thani in Abu Dhabi, the demand is expected to come from within the UAE besides Saudi Arabia and other Arabian Gulf states.
“The market has become price sensitive and travellers are looking for last minute deals and offers where they can get the best value,” said Desmond Hatton, the general manager at Dusit Thani Abu Dhabi. “The business volume wouldn’t be that substantial when compared to the last year, in consideration of the current economic slowdown.” The hotel is offering special packages and promotions to leverage the most out of the existing demand, he said.
Room rates in Dubai have been falling over the past year as more rooms enter the market. In the latest data available, the average daily rate for four- and five-star hotels in May was $229.75, a drop of 4.5 per cent compared to the same period last year, according to Hotstats. The average occupancy rate edged up by 0.7 per cent to 84.2 per cent.
Hotels in prime Dubai locations such as Downtown, Jumeirah, the Marina and the Palm expect to achieve full occupancies while other locations expect to achieve 85 to 90 per cent occupancy levels, according to Mr Aboobacker and hotel officials.
The Ramada Downtown and Hawthorn Suites by Wyndham Jumeirah Beach Residence properties expect to be nearly full.
“Saudi Arabia will have the longest school holidays at 110 days and people expect to travel only after Eid,” said Samir Arora, the cluster general manager of R Hotels who looks after Ramada Downtown Dubai and Hawthorn Suites by Wyndham in Jumeirah Beach Residence.
“Moreover, people are avoiding Turkey and Egypt because of the fear factor, and that is helping Dubai.”
He expects to maintain last year’s rates, as the market is experiencing increased competition from more properties, he said.
About 80 per cent of the guests at these two properties are expected to be from Saudi Arabia, Kuwait and other Gulf countries. The number of arrivals from within the UAE are expected to rise by 15 per cent during the Eid weekend compared to last year, as people are cutting travel costs, he said.
The sluggish economy and the rising costs of living in the UAE have a direct effect on the demand for hotels, food and beverages, as consumers are prioritising their needs and some have become cautious on spending, said Moussa El Hayek, the chief operating officer of Al Bustan Centre and Residence in Ghusais in Dubai. The property expects an occupancy rate above 90 per cent during the weekend.
Mövenpick Hotel Jumeirah Lakes Towers expects to be full during the weekend.
“During the Eid weekend we are forecasting to be full with the highest average rate reachable during the summer period, which is indeed a good boost to our revenue similar to what we achieved last year,” said Bernard Mehawech, a spokesman for the property.
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