There are several news coming across Arabian sea that tourism industry is flourishing or recession crunch will soon be over. These news are neither completely fake nor completely true, as recession will soon be over but dooms day for Dubai hotel industry has not been over yet. This sector will remain under pressure till the end of 2011 or even as long as 2012.
Hotel room rates, adversely hit due to slump in the hospitality segment and this deflation is considered as the largest fall experienced across the Middle East Hotel Industry. Average room rates have fallen and the prediction is that improvement in hospitality sector will happen quite later.
According to a report published by CBRE, this deflation is a result of oversupply (five star hotels are continuously emerging in emirates) and low demand (due to higher rates, people are reluctant to take rooms there), this decrease should be compounded by discount rates to secure demand. As there are many festivals expected to take place in the coming months and it is expected that lot of travelers will visit Dubai, so hotels should introduce discount packages with full services not only to attract more visitors but also to force them to come back again and again. It will be a positive step to support hospitality sector during this hard time. Otherwise the going will be very tough for Dubai’s hotel Industry.
It was seen that traveling for both leisure and business purpose was in vogue in previous years but now both traveling sectors are under pressure. Hotel occupancy level recorded a decline of 10.2 per cent last year because of decline in business activities due to global financial crisis. There is a high degree of uncertainty in the economy this year so leisure travel may take longer time to improve but business travelers should be impressed to come over there.
Dubai hotels may never achieve the same high levels rates as once enjoyed before this downturn but we all are looking forward to hear some better news about this region and especially to feel the arabian warmth again through their hospitality sector.
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