Hotel guests enjoy the swimming pool at the Le Meridien Mina Seyahi in Dubai. Image Credit: Gulf News Archive

Dubai The Gulf's hospitality industry is showing signs of improvement when compared to the last three months, despite a fall in all three key indicators in year-over-year results for November.

"We should see some improvements in the second half of this year if the economy continues on its current path. We expect the region to end 2009 with declines in all the form factors as the spending power of tourists has been affected due to economic slowdown," Konstanze Auernheimer, Director of Marketing, STR Global, said in a telephone interview to Gulf News recently.

According to STR's data, Qatar suffered the worst fall in all three key indicators — occupancy, average daily rate (ADR) and average revenue per available room (RevPAR) rates.

Qatar's occupancy fell 23.3 per cent to 67.3 per cent in November 2009 compared to 87.8 per cent in November 2008. Bahrain was the next worst affected economy with occupancy rates falling by 18 per cent to 68.8 per cent and Kuwait by 11.9 per cent to 56.9 per cent.

Supply increase

He said Saudi Arabia was the sole market to register a rise in all the key factors due to the Haj. Saudi occupancy rates rose 3.1 per cent to 62.7 per cent in November 2009 compared to 60.8 per cent in November 2008.

The UAE suffered an 8.8 per cent fall in occupancy rates to 75.5 per cent compared to 82.8 per cent in November 2008.

However, Auernheimer said the UAE is the only Gulf country to show considerable improvement in the last three months.

In September 2009, UAE occupancy rates stood at 58 per cent while in October it rose to 74.4 per cent.

Qatar recorded the highest ADR at $277.81 (Dh1,019.56) followed by the UAE at $276.35 and Saudi Arabia at $242.41. The lowest was Kuwait at $219.22.

"While the revPAR declines look huge for the UAE, it still achieved the highest revPAR for the region at $208.54 in November. The recent years of investment and development of hotels and tourism infrastructure has led to a strong increase in supply, which now suffers due to missing demand," James Chappell, managing director of STR Global, said by telephone recently.

He said that among the Gulf countries, the UAE registered the most rooms in the "in construction" phase at 28,153 rooms and 51,194 rooms in the total active pipeline. Saudi Arabia followed with 7,243 rooms in the "in construction" phase and 13,664 rooms in total active pipeline.

Best-case scenario

"This year we don't expect a big improvement in the hospitality industry in the UAE compared to last year as things are still foggy. In the best case scenario we expect around 3-4 per cent maximum rise in tourists," Ghassan Aridi, CEO of Alpha Tours, said by telephone recently.

He said this year more rooms will be added in the UAE which will cause occupancy rates to remain the same as last year. It is very difficult for any analyst to predict about the industry, he said.

"For the past two to three months, tourists from the other Gulf countries are flocking to the UAE, resulting in a rise in occupancy rates. The Burj Khalifa will be an added tourist spot this year. We saw tourists from other Gulf states booking rooms for the opening of the world's tallest tower," Aridi said.

He said because of the Burj Khalifa, what we are doing right now is adding it to our tourist packages. Last year Lebanon recorded around 2 million tourists from the UAE followed by Thailand and Malaysia.


Quoting World Travel and Tourism Council estimates, Robert O'Hanlon, Tourism, Hospitality and Leisure Partner at Deloitte Middle East, said recently the travel and tourism economy in the Gulf region is set to expand considerably at an annualised average growth rate of 5.2 per cent during the period 2010-22. Given such a positive outlook for the region, it is extremely important to recognise the fact that the region has the assets and infrastructure to leverage to attain the growth forcast.

He said hoteliers in the region have been engaging in strategic measures such as induced demand generation efforts by offering value for money packages to tourists.

While it is expected that these trends will continue in the near future to attract travellers to the region, tapping newer source markets is an expected trend given the region's commitment to boosting its travel and tourism industry.