Dubai Benefiting from Middle East Unrest

The Middle East unrest has certainly had its influence on the hotel industry in the region.  Between February 1, 2011 and April 5, Egypt lost a reported $1.8b in revenues due to a lack of visitors.  Jordan similarly lost a reported $70m due to unrest.

As Elie Younes, vice president for business development Middle East & Africa, at Rezidor Hotel Group said, “In ten years time, believe me, we’ll probably once again face this kind of recession. With regard to this crisis, there has been a recovery, but I don’t think confidence is there yet.”

The Benefit in Dubai

However, while most countries in the region have seen a decrease in hotel revenue due to the unrest, one country is actually benefiting from it – Dubai.  The emirate actually had a spike in visitors since it has been viewed as a safe and quiet location in comparison to its many neighbors.

As Marc-Francoise Dardenne, CEO Emaar Hospitality Group and Emaar Hotels & Resorts explained, “In the first quarter we had over 87% occupancy in all our hotels, so we unfortunately benefitted from all of the issues in the various places of the Middle East. A lot of business has come our way.”

Ease of Opening Hotels

As a result, Dubai is seeing a sharp increase in hotel building.  Part of the reason for this is that it’s quite easy to open a new hotel in the area, according to David Vely, SVP, Middle East North Africa Development for MGM Hospitality.

While some investors say they are worried that the new supply is going to flood the market, others see it only as a benefit.  Vely said, “I am not worried about the supply. India and China provide an enormous potential customer base for hotels in the region. With the emergence of the middle class and the huge amount of people in these countries who now have the purchasing power to travel, you cannot build hotels fast enough to accommodate people who want to come here if you develop the proper product.”

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