First with Financial Comment from Arabia

Dubai tourism too expensive say UK agents

with 3 comments

burj-dubai-hotel300British travel agencies have warned that Dubai risks losing out to other major destinations like Las Vegas because its room rates and restaurant charges are too high.

Alpha Tours CEO Gassan Aridi told Gulf News: ‘We need to adjust rates to the ground realities’. And Terry Fisher CEO of Gold Medal Travel Group said: ‘We find Las Vegas a cheaper destination than Dubai as its hotel industry has lowered rates to allow better and more attractive prices.’

Global competition

Travel trade attendees at the World Travel Market in London this week spoke of increasing global competition in the year ahead with a reduced number of tourists and business travelers now expecting to pay less for hotels and ancillary services.

However, the World Travel and Tourism Council’s latest report said that the contribution of travel and tourism will stay stable at 20 per cent of the UAE’s GDP for 2010. That said the UAE will be introducing a lot of new capacity in terms of hotels and aircraft in 2010 and that might have been expected to result in a higher percentage contribution.

But what this increased capacity may well prevent is an actual decline in revenues from travel and tourism next year. For across the Middle East travel and tourism is forecast to fall by eight per cent by the United Nations Tourism Organization.

Perhaps the delays in the delivery of some of the aircraft ordered during the boom years are therefore not such a bad thing.

Yesterday the president of Emirates Tim Clark said a delay in the delivery of A380s next year will put back the reintroduction of the aircraft on the Dubai to New York route by at least six months. That might be helpful as the demand on this sector has naturally been impacted by the global financial crisis.

Growing fleet

However, Mr. Clark noted that the airline would still take delivery of 22 aircraft worth $3 billion within its financial year and have 15 A380s flying by the end of 2010 compared with plans for 20 to be operational.

In the first half of its financial year Emirates reported a 13 per cent fall in revenues to $5.4 billion despite a 22 per cent increase in available seat kilometers. Profits rose thanks to a hiring freeze and lower fuel costs.

These cost reductions may not be repeated leading to a squeeze on profits if revenues continue to fall as capacity increases. It is a problem likely to be felt across the board in UAE tourism and travel in 2010 if the warnings from the WTM prove accurate.


Written by Peter Cooper

November 11, 2009 at 9:00 am

3 Responses

Subscribe to comments with RSS.

  1. BA is going to start servicing the las vegas sector soon. for 2 more hours flying time vs dubai, you can drink gamble, act like a bumbling ass- all much cheaper and in 5* surroundings instead of an undersconstruction city. like the ads say- what happens in vegas, stays in vegas.


    November 13, 2009 at 5:58 pm

  2. Realistic room rates of UP TO $100 per night are the best tactic that Dubai could use to lure and get more customers.
    Instead when one looks at the Hotel sites in Dubai the price of $ 250 $300, 400 etc $ per night( 4 & 5 * Hotels) are the norm and a real turn off.

    Also the infamous British tourist habits in Las Vegas pale to insignificance when compare with the actual norms there.


    November 12, 2009 at 12:12 am

  3. Hawaii used to be pretty greedy with their hotel rates,Taxi rates,Restaurant rates, and every other thing they could nab the tourist for and in the end it caught up with them and the tourists stopped returning. This is why Thailand now does well because it is closer and cheaper to Japan. The Japanese did go there in the 80’s and early 90’s but since then have stopped returning and now many of those Japanese have bought condos in Bangkok and other parts of Thailand.

    With a bad and tough economy these days many people are not stupid to pay extra when they can travel to other places for less.


    November 11, 2009 at 8:40 pm

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: