Dubai’s hospitality industry is in a strong position to escape any fallout from the growing financial crisis in the United States, according to industry experts in the emirate.
Visitors from the United States account for only a small fraction of Dubai’s seven million tourists a year, and the impact from their absence would be small. However, if the consumer credit crunch spreads to Europe, experts say that Dubai will have to look to other markets to make up the losses, the United Arab Emirates daily Gulf News reported on Sept. 16.
“Non-essential business travel and leisure travel will inevitability [sic] be hit by an economic slowdown,” Guy Wilkinson, partner of real estate consulting firm Viability, told the newspaper, “but the U.A.E. is in a better position than other regions to tackle the situation.
“Dubai has positioned itself as a destination for wealthy tourists and these people will still be travelling, so the impact will be less than in places like Egypt or Spain,” he added.
While there are already around 50,000 hotel rooms in Dubai, the numbers are expected to increase as the emirate looks to accommodate a projected 15 million tourists by 2015, according to Gulf News. One expert told Gulf News that alternative markets like Russia will become an increasingly important source of tourists. “Russia is very important and this group will continue to grow,” said Bilal Sayyed, general manager of Destinations of the World travel company. “It is a luxury segment that has benefited Dubai hotels [and] it will be able to create new sources of tourists.”
Earlier in 2008, the consulting firm Deloitte Touche Tohmatsu revealed that the Middle East had the highest hotel occupancy and average room rates in the world in the first half of the year.
In a statement posted Aug. 21 on the Middle East business Web site AME Info, the firm said that hotel occupancy in the region was 75.3 percent in the first half of 2008, with the average room rate up 14.1 percent to $180 [USD].
Middle Eastern countries such as the United Arab Emirates and Qatar are investing in tourism as they aim to diversify their economies away from oil.
Global hotel groups, including Intercontinental Hotels Group and Four Seasons, are all expanding in the region to capture emerging opportunities.
Dubai posted the highest occupancy and average room rate of any city in the region at 85.3 percent and $321 per room, Deloitte reported.
“The strength of some currencies against the U.S. dollar, notably the euro, is presenting a challenge for the hotel industry, particularly in Europe which is likely to see a downturn in visitor numbers from the U.S. and England during the remainder of the year,” said Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality and Leisure at Deloitte.
“The Middle East looks set for a fifth consecutive year of double-digit growth, and Asia is also well placed to have another strong year.”
Despite the positive forecasts, Dubai hotel executives maintained that they would observe guest trends in the following months to determine the impact of the current international economic crisis.