Dubai hotel availability falls short of demand

A shortage of hotel rooms in the emirate is damaging tourism, say experts

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By  Sarah Gain Published  December 17, 2006

A shortage of hotel rooms and longer term visitor accommodation has resulted in a wave of cancellations from overseas tourists planning trips to Dubai, according to one Dubai government official. Many travellers planning both leisure and business trips to Dubai are being put off not only by the rocketing room rates in the emirate, but also by a lack of available lodgings, according to Eyad Ali Abdul Rahman, manager for media relations at the Department of Tourism and Commerce Marketing. This industry setback comes despite major investment in the emirate’s booming construction and hotel industry, he claimed. Figures released by the DTCM reveal that Dubai currently supplies 30,000 hotel rooms, with an additional 8000 long-stay hotel apartments. Ambitious plans are also in place for the construction of at least 18,000 more rooms in the next two years. These massive construction efforts, however, have not kept pace with the demand for visitor accommodation, worrying officials that significant tourist dollars are being lost. In spite of the substantial investments that are being made in Dubai’s booming hotel sector, the construction time-span has seen supply rates dip below accelerating demand, causing holidaymakers and events planners to look elsewhere. “The main obstacles are the availability of direct airline routes from countries such as Spain, and the lack of hotel rooms,” confirmed Abdul Rahman. “We are seeing many cancellations from tour operators because they can’t find available rooms.” And for the business and MICE markets, there may be still more issues that are keeping visitors away, according to Rob Clark, director of revenue for the upcoming InterContinental Hotel Group’s (IHG) properties situated in Dubai Festival City (DFC). “The same problems that we face as residents in Dubai are problems for MICE planners and event delegates. The construction work, the traffic congestion — we have to make allowances for these things every day as we go about our business,” Clark pointed out in an exclusive interview with Hotelier. “In fact, these things may be even more of a problem for this type of visitor than they are for residents. The delegates for major exhibitions, conferences and so on are here for a limited time, and have very tight schedules.” InterContinental believes that hotel developments such as those at DFC will help to alleviate availability problems. “Currently, when you have a big group of 500 rooms coming to Dubai, for example, each hotel has an allotment of rooms, so there are 20 in one, 50 in another and 100 somewhere else. Delegates are spread out all around the city,” Clark explained. “What we’re doing with the three IHG hotels at Dubai Festival City (DFC) is creating an ideal scenario where there are these three hotels almost next to each other, able to offer a combined total of up to 2020 rooms,” he continued. “With our DFC properties, the MICE group might not all be able to be in the same hotel, but they can all be next door to each other. So there may be a shortage now, but in six or seven months time, we will be bringing so many rooms to Dubai, and a fully-equipped, state-of-the-art convention centre, and all the other facilities, that we will finally be able to accommodate those big groups.” The Festival City properties are not scheduled to open until mid-2007, however, and until then, booking cancellations and lost tourism revenue may continue to sully Dubai’s fledgling reputation as an international business and leisure destination.

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