Revenues continue to dip in Middle East

The hospitality industry in the Middle East in May 2009 continued to witness declines in key industry benchmark indicators such as occupancy levels and revenue per available room (Rev?PAR). This was mainly because of the fall in business travel and in international tourist arrivals, according to the Deloitte and STR's global hotel performance survey.

All key Middle Eastern cities, except Jeddah and Beirut have seen a decline in occupancy and in RevPar, the report stated.

Robert O'Hanlon, Tourism, Hospitality, Leisure Partner, Deloitte & Touche told Emirates Business: "For the Middle East, the revival of occupancies and RevPAR would be linked closely with the wider outlook of the global economy, specifically the European economy."

He added: "The Middle East is seeing low levels of tourist traffic, which are not locally driven." According to the survey, during the period year-to-date May 2009, occupancies in the region dipped by 10.8 per cent and RevPar decreased by 17.1 per cent when compared to 2008 levels.

In Dubai alone, occupancy dropped by 13.1 per cent and RevPar declined steeply by 35.3 per cent during the period year-to-date May 2009 when compared to 2008.

The average daily rate (ADR) in hotels in Dubai has been softening over the past two months, which has caused the steep drop in RevPAR, according to hotel industry sources.

Senior executives from the Dubai hotel industry are of the opinion that rates have been softening since May but not yet bottomed out, as it was just the beginning of summer. O'Hanlon said: "Dubai continues to face pressures from the increase in supply of rooms as a time when there is a decline in local and international arrivals."

However, he added that the quality of the Dubai hotel infrastructure is such that it is well-positioned to benefit from the signs of local and international revival.

The survey further revealed that continued efforts in international marketing and promotion of Dubai are required to generate demand in the hospitality and tourism industry over the long term.

The Dubai Department of Tourism and Commerce Marketing (DTCM), has already launched a high intensity promotional campaign to generate tourism.

In Abu Dhabi, meanwhile, occupancy levels dipped by seven per cent during the first five months of 2009, after growth in 2008, the Deloitte report said. RevPAR grew by 5.4 per cent during the period year-to-date May 2009 when compared to 2008, due to a 13.3 per cent increase in average room rate during the same period.

As for other GCC cities such as Muscat, contrary to rising performance levels in 2008, the Omani capital continues to witness declines in occupancy in first five months of 2009, according to the survey. Muscat recorded a decline in occupancy of 20.4 per cent and in RevPAR of 15.1 per cent during the period when compared to 2008.

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