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Dubai: More than half of the dozens of planned hotel openings in the Gulf over the next two years will be in the UAE, creating thousands of new hotel rooms that will put pressure on rates amid a global travel business decline.

The organisers of a hotel industry exhibition in Dubai said on Saturday the UAE accounts for $6.1 billion (Dh22.4 billion) out of $8.8 billion being invested in the Gulf in 61 hotel properties that are scheduled to open by the end of next year.

The UAE will see the completion of 22 hotels this year and 13 next year, according to a survey by research and database company Proleads for The Hotel Show.

"With thousands of new hotel rooms coming onstream over the next two years, the hospitality industry will need to focus on standards and value for money for customers. There will certainly be downwards pressure on hotel rates in the short term, but one has to remember that hotels in the GCC region recorded some of the highest average rates in the world last year," said Maggie Moore, director of the show that will run from from May 24 to 26.

Hotel occupancy rates in the Gulf's commercial and tourism hub Dubai fell to 79 per cent last year, the lowest in five years, property consulting firm Jones Lang LaSalle (JLL) said in a report last week.

In 2007, the occupancy rate was 84 per cent.

Occupancy rates fell 7 per cent between July and December last year.

"This came as a result of the new supply in the market, as well as the softening in demand from key European source markets brought about by the dollar appreciation and the financial crisis," JLL said.

In the second half of 2008, average daily rates were marginally higher than the same period in 2007 at Dh1,027, though the revenue per available room (RevPar) was slightly lower at Dh782.

It said the outlook for this year is "less optimistic than previously anticipated, with visitor arrivals well below the DTCM target of 13 per cent annual growth".

The number of hotel guests last year was almost flat compared with the previous year at about seven million. According to the Department of Tourism and Commerce Marketing (DTCM), hotel room inventory rose 15.9 per cent to 49,598 last year.

Dubai expects 2009 "to be more challenging in consolidating the growth".

Tourism authorities in Abu Dhabi, Dubai and Sharjah have stepped up efforts to find new source markets as visitors from key European markets fall due to the recession.

The Hotel Show organisers acknowledge these are "challenging times for everyone" but noted that hotel suppliers continue to have an expanding market in the Middle East as new properties are built.

According to the Proleads survey, five big hotels will be completed this year in Saudi Arabia, followed by seven more in 2010. Qatar will see five new hotels this year and two in 2010, while Bahrain will have one new hotel in 2009 and four in 2010.

Source: Copyright © 2009 Gulfnews.com. All rights reserved.