Special Report: Tourism - Outlook for travel industry much brighter in 2010

16 April 2010

Lowering room rates is generally considered by hoteliers as an option of last resort to draw in customers. The industry prefers to use other incentives such as free breakfasts or two nights for one offers.

But faced with the worst economic crisis seen in many generations and panic over a possible swine flu pandemic, last year hotels throughout the world relented, slashing prices across the board. The Middle East was no exception. Room rates in Dubai, for example, averaged $375 a night in October 2008, but the average for 2009 was nearly 40 per cent lower at $235.

The crisis could not have come at a worst time for the Gulf states, which embarked on a drive to boost visitor numbers aimed at filling thousands of new hotel rooms being built.

The outlook for the travel industry in 2010 is much brighter. However, the new supply coming on to the market means competition among hotels will be intense and they will have to continue offering attractive prices to win custom.

But while rates will remain much lower than in 2007-2008, the industry would do well to remember that the average cost of a hotel room in the GCC is still among the highest in the world.

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