Transit air passengers can boost local hotel occupancy levels

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Hotel occupancy levels in Dubai could increase if more transit passengers are encouraged to break their journeys in the emirate, said industry executives.

"Dubai airport continues to buck the trend by showing dramatic increases in passenger traffic," Darroch Crawford, Managing Director of Premier Inn, told Emirates Business. "The challenge, however, is to encourage more people who transit through Dubai to spend a few days in the city."

Passenger traffic at Dubai airports is projected to grow 13.6 per cent in 2010.

Crawford said hotels should continue to work with Emirates to promote Dubai. They have already joined forces with the Dubai Department of Tourism and Commerce Marketing to offer special packages to boost tourism. This has helped Dubai to fare better than other regions during the economic downturn.

The Deloitte and STR Global survey showed the Middle East was the top performer in July compared with Europe, the Americas and the Asia Pacific region.

Revenue per available room (RevPar), an industry benchmark, rose by 0.44 per cent from June to July 2009 in Dubai, a small relief compared with the fall of 12.23 per cent during the same period in 2008, said the survey.

Occupancy levels for the year to July 2009 was 68.9 per cent, with RevPar at $164.85.

John Podaris, Associate Director of Tri Hospitality Consulting, said: " A lot of traffic through Dubai has been transit traffic, which has caused the increase in occupancy. The growth of Emirates is another factor that drives tourist arrivals in the city."

A senior hotel executive said Dubai had leveraged its position at the crossroads of the world and emerged as one of the major transit hubs. It was also a short-haul distance from countries with large populations and eight hours from the more developed economies, which was an added advantage.

Other international airlines that fly to Dubai have also contributed to the emirate's importance as a hub.

Hoteliers said that once the new law on foreign investment came into force more foreign companies would be interested in setting up bases in Dubai.

"This would make it easier for international companies to set up offices here," said one senior hotel executive. "The new law is expected to give a big boost to the industry in the UAE. The emirate's tax-free status will be an added advantage.

By Nina Varghese

© Emirates Business 24/7 2009