Dubai Hotels See Drop in Revenue

Hotels in Dubai had a drop in revenues for the first quarter of 2009 and are being hard hit by the worldwide economic crisis. The Department of Tourism and Commerce Marketing (DTCM) noted that the fall in revenue is the result of both falling demand and discounted rates, which are trying to make up for the demand drop.

Additionally, analysts are warning that there may be an even greater fall in revenues for the summer and occupancy may fall below 50 percent. For Q1 of 2009, Dubai hotels and hotel apartments had a 14 percent fall in revenues compared to the same quarter in 2008. Revenues in 2009 were Dh3.66 billion, or US$997 million, compared to Dh 4.26 billion last year. Guest nights fell 12 percent to 5.344 million from 6.067 million last year.

The revenue drop comes despite an increase of five percent in the number of tourists. Some of the countries that have seen a major drop in their economies are sending less people to visit the emirate on business and pleasure, and discounts are resulting. Supply is rising as new hotels are opening up and coming on line, which could lead to even bigger falls in revenue and occupancy during the summer.

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