Greedy Dubai hotels stunt DMC growth

Extortionate hotel rates and room shortages in Dubai are impeding the growth of Arabian Adventures, the DMC’s vice president, Frédéric Bardin, has told ATN.

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By  Gemma Hornett Published  September 2, 2006

Extortionate hotel rates and room shortages in Dubai are impeding the growth of Arabian Adventures, the DMC’s vice president, Frédéric Bardin, has told ATN. “Our business is healthy and growing, but it does not grow as fast as it could. We are turning down business,” he said. “Our growth would have been much higher in ’05, ’06 and ’07 if we had the rooms that we said we wanted back in 2003.” The reason for the current room “blockage”, he explained, was that hotel investors had, in the past, been “over cautious”. “They were worried the hotels would not be full and stopped building, but every four years Emirates carries twice as many passengers and more airlines come here all the time. We are really suffering from the lack of rooms,” he said. “Things will hopefully balance out when more hotels open in 2008/2009.” Bardin said inbound business for the June-July-August period this year was lower than previous years “because the room rates are too high”. “Normally most beach properties would see occupancies of 90 or even 100% in August. Some are at 80 or 90%, but others seem to be in the 60s,” he said. “Dubai is now the most expensive city in the world, twice as expensive as Tokyo, and the hotels still think they are going to be full with these rates.” The drop in occupancies forced many Dubai hotels to release last minute special rates and promotions in July, but these came one year too late, according to Bardin. “Now we are fighting with them to get 2007 rates,” he added. Bardin’s main concern is that Dubai will become renowned as a pricey destination with room shortages; a perception that is hard to shake. “There will be some travel agents in the UK for example, that will ask their clients, ‘are you sure you want to go to Dubai?’ They will not want to go through the hassle of getting a room. It’s dangerous if this reputation spreads too much and the image sticks,” he explained. “We are therefore doing a lot of PR and selling to tour operators and telling them don’t give up on Dubai; in two to three years time when there are more rooms, their business can grow 20 to 30%.” Arabian Adventures is also working hard to develop source markets such as Japan, China and Korea and now that Emirates plans to launch flights to Argentina and Brazil, there is potential to grow inbound tourism from South America. “We are still working on the figures and there is the question of distance, but South Americans are accustomed to travelling distances, particularly to Europe, which is 14 hours away. Now we will take them in another direction,” said Bardin. “There will also be huge through-traffic from South America to Asia.”

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