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The off-peak year, Part I

The off-peak year, Part I

Caught in the midst of infrastructure overdrive and global slowdown, the region’s tourism sector will be forced to find new revenue streams to survive the lean times, Part I.

August 10, 2009 8:20 by

The Dubai Department of Tourism and Commerce Marketing (DTCM) has a different story to tell, however. According to the department, hotels in Dubai saw a five percent increase in the number of guests in the first quarter of this year. “A total of 1.99 million guests stayed in Dubai hotels in the first quarter of 2009, five percent more than the corresponding period in 2008,” a DTCM statement said. According to them, the number of operating hotels and hotel apartments rose to 519 in the first quarter of 2009, up from 475 during the corresponding period in 2008, while the revenue of hotel establishments during the January-March 2009 period was AED4.26 billion ($1.2 billion).

Like many others in his sector, Hytonen of Rezidor is unsure about how long this situation is likely to continue. “There has been discussion that 2010 would be a more destabilizing year and [the economy] will pick up 2011 first half. I think it is going to get worse before it gets better, this is at least the feeling. I think the market is not going to get bigger, so we have to fight harder to get our piece of the cake,” says Hytonen.

There is also a disconnect with regard to the supply-demand equation in the hospitality sector. Hytonen notes there are around 45,000 hotel rooms in Dubai today, another 13,000 are estimated to come online next year, and 10,000 more by 2011. He says a lot of these estimates are based on what was in the books last year. “I do not believe operators have adjusted and consolidated the situation yet. We will get a better and more accurate picture by the end of the year,” he adds.

First seen in Trends magazine.

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