Dubai: Hotels in Dubai have slashed room rates by an average 50 to 60 per cent to attract more guests in the low summer season as occupancy has slumped and new properties have created more competition.
With few trade exhibitions and conferences during summer, the number of trade visitors to the UAE drops sharply in the May-August period.
Tourism authorities and the hospitality industry work on special promotions like Dubai Summer Surprises in the low season to bring in more holidaymakers as tourism has become crucial to the country's economy.
But rising cost of air travel and global inflation have affected visitor numbers this year, industry sources told Gulf News.
With more hotels being built in Dubai and Abu Dhabi, the industry is also seeing increased competition for guests.
Bilal Sayyed, general manager of travel group Destinations of the World, believes hotel occupancies in Dubai may be down by 15-20 per cent this summer compared to the same period last year.
He said in Abu Dhabi the decline could be more as Dubai is the primary leisure destination during summer.
"We now have a larger inventory so this could be one of the causes of lower occupancy. The tourist inflow has to match the buildup of room inventory," he said, adding that a "correction" in room rates will eventually bring in more visitors.
Reduction in room rates by hotels is part of their "tactical offers," which include extra nights and incentives like airport transport.
"Hotels are offering us special rates. These are much lower than high-season rates," said Hussain Tehrani, general manager of Al Rais Travel.
A standard single room in a five-star hotel is now available for less than Dh700 compared to the high season rate of Dh1,500 and more.
Similar drastic reductions are being offered by hotels in other categories.
Dubai has been popular with travellers from Europe and countries of the former Soviet bloc due to its image as a safe, liberal and relatively cheaper destination, but expensive air travel is having an impact on tourists from these key markets, Tehrani said.
Visitor numbers from the price-sensitive Indian market are also down and airlines that deploy huge seat capacity on the UAE-India route are seeing lower seat factor, industry sources point out.
However, those still coming to the UAE are benefiting from the cheap hotel rates.
"We are getting a lot of group tourists from India because of low hotel room rates," said Ali Asgar Hussain, inbound travel manager at Lama Desert Tourism.
Some business hotels also retune their facilities to make them suitable to leisure tourists in summer.
"It is easy to achieve more than 90 per cent occupancy in winter months, but in summer we have to make a lot of efforts to reach 75 per cent," said Farah Esmail, director of sales at the Dusit Thani Dubai.
The Dusit Thani hotel on Shaikh Zayed Road has created a children's entertainment area, which will be closed when business travel picks up between November and March.
Dubai had 452 hotels and apartments in 2007 and the number grew to 475 at the end of March this year, according to Dubai's Department of Tourism and Commerce Marketing (DTCM). The city has more than 65,000 hotel rooms.
Abu Dhabi aims to more than double the number of hotel rooms to 25,000 by 2015.