Dubai hotel benefits from unrest in region

Dubai hotels have witnessed a surge in visitors in the wake of unrest that has swept the region. The latest data from accountancy firm Ernst and Young has revealed that Dubai hotels recorded the highest revenue per room (RevPAR) — an industry benchmark — in the Middle East in June 2011 over the same period last year. In its Middle East Hotel Benchmark Survey, E&Y claims that Dubai hotels' rooms yield touched $119 (Dh437) in June 2011 over $107 in June last year. Occupancy levels for the emirate's hotels were the highest, too, in the period at 75.9 per cent, up almost six per cent from 69.9 per cent in June last year. Market experts attribute the increase in UAE hotels to the majority of holiday and summer traffic being diverted to Dubai amidst the geo-political unrest in the Middle East and North Africa (Mena) region. Article continues below And sure enough, the biggest drop was recorded in Egypt's Sharm Al Shaikh hotels where the revenue slipped 48.6 per cent in June — usually a peak month for tourism — over the same period a year ago. Occupancy, too, saw the region's highest drop of 30 per cent in the Egyptian resort in the same period. Meanwhile, hotels overall in Cairo, saw revenues declining by almost 40 per cent to rest at $44 in June 2011. As Michel Noblet, president and CEO of HMH Hospitality Management Holdings, pointed out: "A lot of business was re-routed to Dubai especially from countries affected by political unrest. We have also seen a lot of groups coming in from places like Korea and China. There has been some kind of a slowdown from Europe but the regional traffic has in a way made up for this drop in business." Abu Dhabi hotels, on the other hand, saw rooms yield declining by 11 per cent year-on-year in June 2011, as per E&Y estimates, recording RevPAR of $116 in June 2011 as against $130 last June. Occupancy at the UAE capital's hotels, however, recorded a marginal increase of one per cent in the period. "We believe it is a very temporary set-back. There is an oversupply of rooms in the region but Abu Dhabi has got a very strong economy with excellent infrastructure, fabulous events and good growth that will sustain our industry in the near future," said Noblet. Another badly hit market was Bahrain, where hotels in Manama experienced a massive 47.2 per cent drop in revenues, with room yields declining from $134 in June 2010 to as low as $71 in June 2011, according to the E&Y estimates. In the year-to-date performance, meanwhile, the first six months of this year saw Dubai hotels' occupancies going up to 82 per cent, up from 79 per cent in first half of 2010— the highest in the Middle East,