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Al Habtoor Group Chairman responds to “industry experts” quoted in a report on Dubai’s hotel industry

24-MAR-2014

Average room rate for 2013 (YTD) at a Habtoor hotel: AED 1,174.00 (US$ 319.45)

Khalaf Ahmad Al Habtoor has responded to a report published in Dubai’s Al Bayan newspaper which quotes "industry insiders” as saying Dubai saw the highest hotel rate in the world in January 2014.  Al Habtoor said the report, which bears the headline “500% increase in Dubai hotels room rates, benefiting from the rising demand” is “baseless and full of inaccuracies.”

One industry expert suggested putting a cap on hotel rate increases in the UAE, similar to those in the real estate sector, and like a model used in Malaysia.

Al Habtoor said, “It is a case of supply and demand. January is in our peak season. Dubai saw a marked increase in travelers to the region in January thanks to the growth of air traffic to the country. Occupancy rates have reached 100% in January, which is the only reason why visitors have booked their rooms outside Dubai for the Arab Health Conference, not due to high room rates in the emirate as some have claimed. However, our hotels in Dubai are not the highest in the world. We don’t even rank in the top 10.”

Here are the facts. According to STR Global, which benchmarks hotel data for over 6.4 million rooms worldwide, hotels in Dubai achieved their highest February Occupancy rate since 2007.

Another survey by HotStats - which provides date to hoteliers in the UK, Europe and Middle East - Dubai’s hotel occupancy rate reached 83.6 per cent in January.  The average room rate (ARR) increased by 10.8 per cent to reach $402.15 in January.

Al Habtoor said, “That figure is certainly not the highest in the world. Hotel prices in London, Paris, and parts of the US like New York, Los Angeles, and Miami are higher. The average room rate in one of my hotels for 2013 year to date was 1,174 dirham’s. That’s US$ 319.45 dollars.”

MENA Hotstats said several factors contributed to the rise in January; The Dubai Shopping Festival (DFS), the emirate’s most popular touristic events of the year; the boom of tourism in Dubai and UAE in general and the diversion of tourists from Cairo and Beirut, mainly from Saudi Arabia.

Al Habtoor said, “What we have to take into consideration is the fact that a majority of hotels in Dubai are 5-star compared to hotels in Europe and the US which have more varied ratings.”

Ernst & Young showed in its RateGain’s Hotel Pricing Trends in the US for the period of November 2013 to January 2014 that the median rate for five-star hotels in Miami ranged from US$ 431 to US$ 531, while in New York it ranged from US$ 571 to US $690, depending on the time of year. This is significantly higher than the average room rate recorded in Dubai in January this year.    It is a similar picture for 5-star hotels in parts of Europe too, with E&Y showing the median rate in Paris is US$ 538 and US$ 599 in London for the same period.

The Economist Intelligence Unit recently released its 2014 Worldwide Cost of Living survey which said Dubai ranks among most affordable cities in the world. In fact, Dubai is in the bottom one-third among global cities in terms of cost of living. The city ranked no. 94 for 2013 out of 131 metropolitan cities.

Another report recently published by EIU highlighted the most expensive city in the world. Dubai trailed behind the likes of Singapore, Sydney, Switzerland, Tokyo and Paris.

Top 10 Most Expensive Cities  (As of March 2014)

1

Singapore

2

Paris, France

3

Oslo, Norway

4

Zurich, Switzerland

5

Sydney, Australia

6

Caracas, Venezuela

6

Switzerland, Geneva

6

Melbourne, Australia

6

Tokyo, Japan

10

Copenhagen, Denmark

Source: Economist Intelligent Unit (EIU)

 

Top 10 Most Expensive Cities for Hotel Stays  (2013)

1

Monte Carlo

2

Muscat

3

New York

4

Key West

5

Rio de Janeiro

6

Cancun

7

Moscow

8

Boston

9

Cannes

10

Geneva

Source: Hotels.com

 

Top 10 Cities for World’s Most Expensive Hotel Stays

2013 ADR

1

Boro Bora, French Polynesia

$799

2

Tremezzo, Italy

$503

3

Newport Cost, California, US

$501

4

West End, Anguilla

$499

5

Wailea (Maui), Hawaii, US

$470

6

Mahe, Seychelles

$448

7

Soufriere, St Lucia

$448

8

Manalapan, Florida, US

$448

9

St John, US Virgin Islands

$444

10

Oahu, Hawaii, US

$440

Source: Hotel Price Index, Hotels.com