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There’s a recession relapse in tourism, except in the UAE

There’s a recession relapse in tourism, except in the UAE

Countless reports in 2010 pointed to a recovery for the hospitality sector in 2011, but recent events in the region have caused a relapse…except in the UAE.

May 26, 2011 1:17 by

According to the UNWTO World Tourism Barometer, international tourist arrivals rose by almost seven per cent to 935 million in 2010, rallying from a four per cent decline in 2009, when the impact of the global economic crisis was at its peak.

In the Middle East, the figures were even more impressive – an increase of 14 per cent to 60 million arrivals, attributed in part to discounting by hotels and the advent of budget-friendly
tourism options.

And UNWTO predictions for 2011 were for more growth at a rate of between four and five per cent, a target that seemed achievable given the soaring visitor arrivals in the region so far.

Fast forward a few months and the picture is very different.

STR Global’s report on hotel performance for February indicated the extent of the damage to tourism in the region, demonstrating a decline of 12.6 per cent to 56.7 per cent for overall MEA hotel occupancy, although the average daily rate rose by 17.1 per cent to $188.53.

According to managing director Elizabeth Randall, the month saw the first impact of unrest across the region: “Egypt’s occupancy dropped by 78.5 per cent to a monthly average of 15.9 per cent, while in Lebanon the collapse of the national unity government has affected the market with a drop in occupancy to 39 per cent for February.”

Bahrain’s hospitality sector suffered less, with occupancy dropping 17 per cent to 61 per cent, but Randall said the full picture remained to be quantified in the ensuing months.

Move down the Gulf and the mood was very different, with the UAE enjoying booming business as a result of a healthy mix of leisure, corporate, exhibition and school holiday traffic, in addition to some incremental arrivals due to events in Egypt in particular.

According to Luc Delcomminette, VP of Arabian Adventures, overall visitor numbers to the UAE increased due
to ongoing marketing efforts combined with the availability of rooms: “In the early days of the political crisis in Egypt, Arabian Adventures welcomed guests who diverted from their original

”In addition to this, the diversity of Dubai’s offerings as a destination and the quality it provides at a competitive rate are also contributing factors.”

Operators in countries that issued advisories against travel to Egypt took measures to place their clients elsewhere, with Natalie Tours from Russia, for instance, increasing flights to the UAE to cater to demand for winter sunshine.

In Abu Dhabi, guest nights in February increased by 29 per cent, occupancy rose by 16 per cent and the length of stay was extended by 10 per cent, with guest numbers from Saudi Arabia rising by 90 per cent, while arrivals from the UK increased by 29 per cent, from France by 49 per cent and from Russia by 88 per cent.

Across the board in Dubai, hoteliers enjoyed a surge in business: “As a result of recent events in the region, Al Bustan Centre & Residence saw an increase in occupancy to almost 100 per cent since the beginning of 2011,” said GM Moussa El Hayek.

“Exhibitions attracted thousands of visitors, and many tourists from the GCC diverted their travel plans from Cairo and other cities in the region to Dubai during the mid-year holiday.”

Newcomers such as the Park Regis Kris Kin Hotel Dubai were operating at almost full house too, according to GM Scott Butcher: “It has been a boost for the hospitality sector, but the longer term is more debatable, and it will depend on how quickly the affected countries stabilise – meanwhile, Dubai gains as it is seen as a safe haven destination in the region.”

Some perceived a shadow over the Middle East as a whole, with Nick Bauer, GM of the Dusit Princess Dubai, reporting some cancellations: “These have been instigated by travel advisories as people at times can confuse the actual suffering countries with non-concerned peaceful neighbours.”

And at the annual gathering of travel professionals at ITB in Berlin in March, there was pressure for incentives to keep the travellers en route to the Middle East, no matter the destination: “Agents were indicating the need for cheaper rates and more imaginative packages in order to entice summer leisure business to the region,” said Mike Scully, MD of Seven Tides and developer of several Movenpick hotels and resorts in Dubai.

“However, most indications were that if Dubai remained competitive on both price and quality of offering, there would be no negative downturn … other than what would normally have taken place due to the present economic climate.”

For the region as a whole, positive PR and marketing is essential, according to Peter Lilley, executive director of MENATA (Middle East and North Africa Travel Association), who warned of an escalating spiral of bad publicity: “It is understandable that tour operators have had to consider cutting capacity … but even quite modest cutbacks in capacity can potentially undermine consumer confidence.”

This article was originally published in GMR May 2011.

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