Dubai hospitality leads city recovery as occupancy and rates jump
Posted on 27 April 2011 with 1 comment from readers
Next week Dubai hosts the annual Arabian Travel Market exhibition, and the city’s hospitality scene is booming. Dubai is benefiting as a safe haven in a very troubled region with tourists avoiding Egypt, Jordan, Syria, Lebanon and Bahrain, while business is also relocating to the city, particularly from Bahrain.
Despite the recent boom in hotel construction and constant new inventory, hotels are mainly full along the beach and running at high occupancy in the town. Room rates initially lagged this recovery but are now catching up.
Higher rates
ArabianMoney looked at Internet rates available this weekend. The top beach hotels are again commanding big prices with the Burj Al Arab out front at $2,177 for the cheapest room, with the Ritz-Carlton beach hotel second at $735, followed by the $661 One&Only and $613 Atlantis. Best buy might be the new Amwaj Rotana in the Jumeriah Beach Residence complex for $172 (click here).
Walk-in guests from Saudi Arabia are finding it hard to get a room, and are not used to these prices if Bahrain was their usual weekend destination. They will find better bargains downtown.
The brand new five-star Movenpick Deira is available from $109. The incredible new Ritz-Carlton in the Dubai International Financial Centre is also a relatively modest $259 (click here).
That probably reflects the low level of activity in the Dubai financial sector these days. It is a different matter if your hotel is next to the Dubai Mall, a major draw for the retail tourist. The Armani costs $763-a-night, The Palace $407 and The Address from $381 this weekend.
For the Dubai hospitality sector this year has come as an incredible surprise. Nobody anticipated a recovery of this order, and most warned that the summer of 2011 was looking the worst for many years.
Worst of times
Emaar chairman Mohamed Alabbar said this week that Dubai did well in the best of times and also in the worst of times – conveniently forgetting the two-year depression after the global financial crisis that hit the global hub city hardest in the region. But he does have a point now.
The big question is whether a hospitality boom can be translated into something more enduring for the local economy. Dubai does often prosper when others question the future of the region. It was the same story after 9/11.
That terrorist attrocity looked like the end of the Middle East. But in fact for Dubai it was the start of a multi-year construction and real estate boom as Arab money rushed back from America and found a home in Dubai.
Will there now be another wave of investment in the city? It is probably too early to be sure of that but full hotels are a sign that prosperity is returning.
1 Comment posted by readers:
Ed., do you think that Charles Ridley and Cornelius Ryan will succeed in their appeal against their 10 year sentences? What effect will this have on the expat community or does that community think they got what they deserved?
Ed Note: No idea about their particular case. The general clampdown on corruption in Dubai is welcome. It’s notable that nobody has been charged for frauds associated with the global financial crisis in the USA – a travesty of justice in a democracy supposedly built on the rule of law. Bending the rules to help the economy is one thing, but putting the economy above the law – that is the route to disaster indeed.