Thirty hotel developments delayed in Dubai
DUBAI – Thirty hotels due to open in Dubai this year are expected to open in 2008 and will cause a drop in occupancy levels, consultancy firm Colliers International said in a report.
“An increase in tourism is not expected to offset this supply injection,” it said.
According to projections earlier this year by Dubai’s Department of Tourism and Commerce Marketing, the number of hotels will increase from 303 to 325 in 2007, providing an additional 8,370 rooms, and seven new hotel apartments will add 1,936 rooms.
According to a Gulf News report , Colliers said six new four- and five-star hotels opened between 2006 and the third-quarter of 2007, adding 1,294 rooms. “Approximately 30 hotels that had a previously stated delivery date for 2007 remain under construction,” it said.
The number of hotel rooms is expected to increase by 32.7 per cent annually until 2011.
“We anticipate a disproportionate number of additional rooms to enter the market between the third quarter of 2008 and the second quarter of 2009,” Colliers said.
“Our hospitality model suggests that in the mid-to-long term, we are at risk of an oversupply of four-star and five-star hotel rooms,” it added.
The huge increase in room supply is expected to cause hotel operators in the emirate to adopt competitive pricing, which is likely to result in a decline of rack rates and revenue per available room.
Ian Jarrett
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