Hotels in Dubai have reduced room rates between 25 and 30 per cent to attract visitors during the slow summer season, according to industry experts.
“The summer months have traditionally attracted less tourists to the emirates compared to other months because of the hot weather,” says Christopher Hewett, senior consultant at TRI Hospitality Consulting.
In June, the average room rate for four- and five- star hotels in Dubai is expected to be around $180 (Dh661) from June to September, a 28 per cent drop from the average rate of $260 from January to April, according to Chiheb Bin Mahmoud, executive vice-president and head of hotel advisory for the Middle East and Africa at Jones Lang LaSalle.
However, Hewett says the average room rate in Dubai during the summer months is expected to stand between $210 and $220.
Meanwhile, occupancy levels are expected to drop to 70 per cent from close to 90 per cent enjoyed by hotels from January to April, according to Hewett.
July is expected to have the lowest occupancy rate as it coincides with Ramadan, says Guy Wilkinson, managing partner at Viability Management Consultants, a hospitality consultancy.
“During Ramadan, Muslims are fasting and do not travel much,” he said, adding that visitors do not come to the country due to the limited entertainment options available during that time. Dubai is expected to receive less business visitors from June to August as the city experiences a slowdown in business activity, Bin Mahmoud said.
Instead, scores of leisure tourists are expected to arrive to shop and take part in a number of activities, such as the Dubai Summer Surprises, the annual cultural festival.
Tourists from traditional source markets such as Russia, China and the UK are expected to descend on the city throughout the summer, besides GCC tourists.
“The majority of our bookings are from Saudi Arabia, which makes up around 60 per cent, followed by the Kuwait market with 20 per cent of the total bookings,” said Nader Abu Al Ezz, acting general manager at Emirates Grand Hotel in Dubai.
However, Dubai may see more Australians arrive due to Emirates’ partnership with Australia’s Qantas, Hewett points out, as the two airlines combined operate 98 flights a week between Dubai and Australia.
In Abu Dhabi, too, room rates are lower this summer compared to previous months. The average room rate in four- and five- star hotels in the capital is expected to stand at around $110, a 30 per cent drop from $165 for January to April.
Hewett estimates the average room rate to be between $110 and $115 in June.
Occupancy during the summer is expected to reach above 60 per cent, while in the first four months of the year, hotels have maintained occupancies close to 80 per cent, according to Hewett.
“Abu Dhabi is a corporate- driven market. There is low demand during this period because corporate activity drops in the summer as business visitors from markets such as Europe go on holiday,” he said.
Improved Showing
The hospitality sector in Dubai is performing substantially better than last year, according to Hewitt.
Hotels in Dubai are expected to record higher occupancy levels throughout the summer compared to the same time last year.
The increase is between eight and 15 per cent on average, according to the hoteliers interviewed by Gulf News.
Occupancy levels are expected to be higher even for the month of August, which records one of the lowest occupancy rates all year. It is expected to stand between 68 and 70 per cent, compared to 64 per cent in August last year, said Hewett.
Average room rates have improved as well. Some hoteliers in Dubai said they expect an increase in room rates between 10 to 15 per cent on average compared to last year.
The same can be said for Abu Dhabi. Occupancy levels during the summer months have improved marginally. Hotels are expected to record an occupancy rate of over 60 per cent from June to August, compared to 59 per cent during the same time last year, Hewett said.
“This is credited to Etihad Airways’ expansion of its network and the increase in the number of people going through the city,” he said.
However, Bin Mahmoud said hotels have recorded slightly higher occupancy rates this summer compared to same time last year. “[Occupancy stands at] 70 per cent, relatively a little higher than last year by two per cent,” said Ayman Ashor, general manager at Tilal Liwa Hotel in Abu Dhabi.
“We have performed well in the corporate and government segments due to the ongoing projects, plus a shift in business trends from customers using online booking apps and social group buying sites. Overall, the key performance indicators showed a positive increase in the number of guests, room nights and the average length of stay,” Ashor explained.
However, room rates in the capital have not changed, Hewett said.
The average price for a room in a four- and five- star hotel stands at $200 in Dubai and $140 in Abu Dhabi, Hewett said.
