10/02/2009 11:40 PM | By Arno Maierbrugger, Deputy Business Editor
Following sharp price drops in the first quarters of 2009, the situation in the hospitality industry in the UAE is about to improve as hoteliers have adjusted to the economic situation. With more promotions, bookings have gone up recently, and the region is witnessing a recovery in the sector.
Gulf News spoke to Walter La Faro, Director of Market Management for Middle East and Indian Ocean region of the online booking company Hotels.com.
Gulf News: What is the main reason that the UAE is developing against the global trend in hotel bookings?
WALTER LO FARO: We has seen a substantial increase in bookings to the UAE during the past 12 months. The increased number of hotels, lower rates and the lower air fares have certainly helped this trend, making the UAE accessible to a wider range of travellers than in the past. An increasing number of travellers have turned to online bookings both for convenience and to find the most updated rates and promotions.
For how long can it be healthy for Dubai hotels to drop prices to boost occupancy?
Price dynamics typically reflect demand trends, and this is the same all over the world, weather in Dubai, in Paris, or in Boston - and we know that customers have lately turned extremely price sensitive. Globally the hotel industry has been facing this very same trend (and for a longer period than in Dubai), so I would say that the situation is perhaps less dramatic here than in other destinations. We provide hoteliers with dynamic pricing tools, which allow them to practise more accurate revenue management and to maximise revenue by adapting in real time to demand and market trends. According to our latest price index, customers paying in Sterling saw prices in Dubai fall by 4 per cent in the first half of 2009, while in Abu Dhabi prices for UK travellers actually rose by 15 per cent.
The first 5-star hotel has announced it will discontinue its operations in Dubai (Angsana Hotel on Shaikh Zayed Road). Are you expecting more closures?
I would think that is more of a one-off case. If anything we are going to see less or delayed openings and some apart-hotels - the ones originally planned as residential properties - might find it more cost effective to revert back to residential use. In my opinion, even during this economic slowdown, the GCC remains one of the most interesting and profitable regions for hotel developments.
What is the percentage of online bookings among tourists and travellers coming to the UAE?
There are no official statistics on this and specifically for the UAE. As a rough estimate I would say overall something in the region of 13 to 15 per cent and growing very fast. With us it is 100 per cent.
How do GCC residents adopt online booking opportunities?
Internet penetration has increased dramatically in the GCC during the past few years and statistics show 42 million people currently online. In the UAE the internet penetration has reached 60 per cent of the population, higher than Italy and only 7 points behind Germany. Following this trend, back in May this year we launched Hotels.com in Arabic which is gradually picking up interest, especially among the local younger generations.
Your outlook for the UAE hospitality industry in the coming year?
In a few years the UAE will boast probably the best hotel portfolio in the world. Only time will tell, as the worldwide economy recovers, how the global hospitality industry will look like then. The sure thing is that the UAE will have all the numbers to maintain a high competitive edge.Supplied picture
