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Tourist numbers up, spend up… profits down

Tourist numbers up, spend up… profits down

Good and bad news for the UAE’s hotels, as more tourists are here and tourism income is up. So why are they making less cash?

September 15, 2010 3:25 by

Good news for Dubai’s tourist industry, as the number of visitors to the emirate reportedly increased by 9 percent in the first half of this year.

The Dubai Department of Tourism and Commerce Marketing has released its report on the first six months of the year, and says the steady growth has lead to a 6 percent increase in hotel revenue, now up to AED 6.9 billion.

“Despite the challenging conditions faced by the global tourism industry last year, Dubai was still able to achieve impressive results in terms of tourist arrivals, hotel revenues and tourism-related events,” said Khalid Ahmad Bin Sulayem, director-general of DTCM, in a statement.

But before any hotel operators go taking the champagne out of the mini-bar, bear this in mind: Dubai has seen a 16 percent increase in the number of rooms in the city, and an increase in the number of hotels of 6 percent this year alone. In other words, figures for the industry as a whole may look promising, but with more space and businesses on the block, the reality is that operators are slashing rates to attract visitors and keep occupancy up. It’s working – occupancies are being maintained, says the DTCM, in spite of the extra capacity – but while the visitors are coming, each one brings less profit.

In fact these occupancies have been bought at a heavy price in some areas, according to Emirates 24-7. It quotes a survey from that shows Abu Dhabi and Dubai have witnessed the biggest drops in hotel room rates of any of the world’s top cities, according to second quarter figures. At least as far as American travelers are concerned.

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