Hotel Rates Going Down

Room rates in Dubai see drop of up to 30% _ The National – Amena Bakr – 23 November 08

…Four- and five-star properties in the emirate have cut room rates between 10 per cent and 30 per cent… many Dubai hotels had removed their surcharges.

…Among the hotel operators Lama Tours deals with is the Jumeirah Group, the Dubai-based luxury chain, which Mr Singh said had reduced its rates by 10 per cent from last year’s levels. A spokesman from the Jumeirah Group said in an e-mailed statement that most of the chain’s Dubai hotels were enjoying occupancy rates of 90 per cent and above.

…However, the evidence of declining occupancy and room rates was revealed last month, when Smith Travel Research (STR Global), a US-based industry consultancy, released its monthly Middle East report for September. Overall, it found that Dubai occupancy rates had fallen 4.2 per cent and revenue per available room was down 8.8 per cent. STR Global’s report found that occupancy rates throughout the Middle East had also suffered from the financial crisis, dropping 5.3 per cent to hit 63 per cent.

…we will start to feel prices drop even further in the coming two to three months…

“The dramatic, swift exchange-rate turmoil from key markets such as the UK pound, which lost 25 per cent to the dollar and 26 per cent to the euro, are making our destination not so attractive as in the past,” Mr Louis said.

“It is also obvious that corporate groups, incentive groups are seriously down from last year. Major international and Dubai-based travel operators have registered cancellations. Most financial institutions, real estate firms, automobile groups have had to reassess their annual meeting plans.”

…In Abu Dhabi, the results of the slowdown are still not being felt by hotels.

“Our occupancy rates have been about 89 per cent over the past couple of months and are still looking good,” said Shady Nikola, the director of rooms at Rotana Hotels and Resorts.

“Business tourism is still very strong here and I don’t expect it to slow down as long as people come here for business meetings. In the coming months, we even plan to increase our rates.” He declined to say how much rates would be increased.

Hotel Occupancy Rates Decline; Expected to Fall Further -  CalculatedRisk – 04 November 08

A couple of stories …

From the Birmingham Business Journal:

In projections for 2010, national hotel research firm Smith Travel Research predicts hotels will see a decline in occupancy rates over the next two years … The firm expects occupancy to drop 3 percent to 61.2 percent by the end of 2008, compared to last year, and said it will slip even further to 58.7 percent by 2010.

And from SignonSanDiego.com: Hotel occupancy rates crater in Hawaii

Almost 40 percent of the state’s hotel rooms languished empty in September, the highest rate since the Hawaii tourism downturn in the aftermath of the Sept. 11, 2001 terrorist attacks, a research firm said Monday.

Average statewide hotel occupancy plunged 11 percentage points to 63.2 percent from 74.2 percent the same month a year ago, research firm Hospitality Advisors said in a report.

While the weakening economy is pushing down occupancy rates, a large number of new hotel rooms are still being added….