Abu Dhabi will not issue any new hotel licences in the capital until further notice due to oversupply. However, none of the already issued licences will be revoked even if construction of the hotels has not begun, said Alrroya Aleqtissadiya, quoting Naser al-Riyami, an official in the emirate's tourism authority.
Across the oil-rich state, which accounts for more than half of the United Arab Emirates' economy, government-backed real estate, commercial and tourism projects, many conceived during the boom years of 2003-2008, are under review and in some cases being delayed or put on hold. Officials at the tourism authority were not immediately available for comment.
Hospitality consultants have said that the projects have pushed the hotel market to a point of saturation, and with even more hotels scheduled to open this year, this problem has the potential to become acute. Some argued that a rate war when hotels slash prices in the face of competition is underway.
The average room rate in Abu Dhabi dropped 14 percent to about Dh450 in 2011, the paper said, as four thousand new rooms came online bringing the total number of hotel rooms to almost 23 thousand in the capital. Abu Dhabi's tourism authority posted a 6.5 percent growth in guest arrivals last year, as new hotels and an increase of Arab tourists from the GCC brought the number of hotel guests to 2.11 million in 2011.