The global financial crisis has had a severe impact on the hotel industry worldwide as companies and individuals have cut back on their travel expenses. The Middle East, especially Dubai, has been no exception, as evidenced by a new report by STR Global which showed that hotels in Dubai saw the biggest fall in revenue in the region in the first half of 2009. Across the region, hotels in 22 cities witnessed an average 10.9 percent decrease in occupancies and a 17.2 percent drop in revenue per available room (RevPAR), the report added. Marriott's hotels are outperforming the market in many key cities in the Middle East and the company is confident that it is in a better position to weather the economic crisis than its competition. The company also contends that although the region's hotel industry has been slowed by the economic downturn, it remains one of the strongest markets in the world. While it is true that the hotel industry in Dubai has experienced a slowdown in recent months, the situation is not as bad as the image that has been painted by the media, said Jeff Strachan, Marriott's director of sales and marketing for Middle East and Africa. Strachan argues that while the hotel industry in Dubai and the rest of the Middle East has indeed taken a blow, it is still very robust when compared to the rest of the world. The average RevPAR in the Middle East was $131 in the first six months of 2009 whereas it was $159 in the same period last year. The other regional market that is closest is the Caribbean at $109, and it has dropped from $152. Part of the reason why Dubai may be getting such a bad rap is that its performance in 2008 was so extraordinary, with an average room rate of $333 and RevPar at $275. With hotels across the globe struggling with revenue and occupancy, the name of the game now is market share, not profit, he said. For its part, Marriott is outperforming the market in Egypt, Kuwait, and Saudi, and is far exceeding its competition in Dubai. To lure guests, Marriott has tried to focus on offering add-ons such as its current free-night stay promotion, but it has also cut room rates across its network, including the Middle East. “It's a very competitive environment at the moment. You can sit and be a spectator for only so long; sooner or later you will be dragged into the game,” Strachan said. “You don't want to be the first one to go in and lead the way in rate slashing, because all that will happen is the market will be repositioned at that level and everyone will reposition around that.” ‘Obviously if three or four of our competitors decide they are going to start selling at a certain rate, we will position ourselves around that somewhere or we will lose share.
