Tamince also said Rixos would open six more facilities, five of which would be overseas, in 2012. Rixos Hotels had a turnover of $330 million in 2011.

Hotels in Dubai achieved notable improvement across all performance measures in January and outperformed the other Mena markets surveyed by HotStats by a big margin.

Occupancy and ARR for the four and five star chain hotels in the emirate increased by 4.5 percentage points and 9.9 per cent to touch

87.7 per cent and $327.41 respectively as the city hosted the 17th edition of Dubai Shopping Festival (DSF) during the month. Hotels across the city reported peak occupancy and rates during the month, boosting the citywide RevPAR by 15.8 per cent to $287.25 and GOPPAR by

18 per cent compared to the same period last year.

“The 2011 edition of DSF is estimated to have attracted 3.9 million visitors during the month. The figures for 2012 are yet to come through, but given the growth tend in visitor arrivals, these figures are likely to have grown substantially this year. The DSF has given a solid start to the year and I believe that Dubai hotels will continue to see strong performance levels during 2012,” Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.

In Abu Dhabi, hotels posted double digit growth in occupancy while the decline in Average Room Rate (ARR) appears to have slowed during the month of January 2012, according to the latest HotStats survey of full-service hotels in six MENA cities by TRI Hospitality Consulting.

Abu Dhabi hotels reported a 10.3 percentage point growth in occupancy in January and closed the month with an overage occupancy of 74 per cent. However, the ARR for the month dropped to $164.23 compared to

$188.01 for the same period in 2011. Interestingly, the rate decline in the city appears to have slowed considerably during the month, from

23.5 per cent in December 2011 to 12.6 per cent in January, which was driven by an 11 per cent month-on-month growth in ARR over December.

According to Abu Dhabi Tourism Authority, hotels in the emirate received 2.1 million guests in 2011 with the growth mainly triggered by a 30 per cent rise in Indian visitors and 15 per cent growth in visitors from China.

“Abu Dhabi has witnessed a strong recovery in occupancy levels in 2011 on the back of increased tourism arrivals to the Emirate as the Arab Spring diverted both regional and international tourists to safer destinations like the UAE. However the growing competition in the city, which caused the rates to decline by as much as 19.3 per cent last year alone, is likely to keep the pressure on performance in 2012 as more than 2,500 hotel rooms are expected to open in the city during the year. Our research indicates that the drop in average rates is not confined to five or four star hotel markets, but the rate competition has had a contagious effect across all hotel categories from upscale to budget hotels and hotel apartments,” said Goddard.

Occupancy levels in Jeddah went up by 11.6 percentage points to 75.5 per cent and Average Room Rate (ARR) increased by 15.2 per cent to

$217.43 during the month, boosting Revenue Per Available Room (RevPAR) by 35.2 per cent to $164.04.

The growth in the top line, combined with a 2 percentage point drop in payroll costs, caused a surge in profit during the month as the Gross Operating Profit Per Available Room (GOPPAR) surged to $115.35, up by

63.7 per cent over the same period in 2011.

The growth in hotel performance comes in the wake of the inaugural Jeddah Shopping Festival, also known as Hayya Jeddah 2012, which was kicked off on 18th January. According to the event organisers, the month-long festival was expecting to attract over a million visitors to the city from both within and outside the kingdom as it coincides with the spring break for schools in the region.

In Riyadh, however, hotels saw a dip in overall performance during the month as average occupancy dropped by 2 percentage points to 61.5 per cent and ARR declined by 7.6 per cent to $258.29. Consequently, the city witnessed a 10.5 per cent drop in RevPAR and 6.2 per cent drop in GOPPAR during the month making it the only GCC city amongst the four surveyed by HotStats to post a RevPAR decline during the month.

“The Saudi Commission for Tourism and the local authorities are undertaking numerous initiatives to develop tourism, mainly focusing on attracting domestic travellers. Some of these programs, such as the Jeddah Shopping Festival, are showing results. These are indeed steps in the right direction to boost local tourism sectors and will also help reduce seasonality issues and improve overall performance of hotels,” commented Peter Goddard, managing director of TRI Hospitality Consulting in Dubai.

In Egypt, the four and five star hotels surveyed by HotStats reported subdued performance in January 2012 as the continuing political uncertainty kept business and leisure visitors largely away. Hotels in the capital Cairo reported occupancy of 36.8 per cent and ARR of $116.18, down by 31.6 percentage points and 3.7 per cent respectively from the same period last year. In 2011, Cairo hotels have managed to maintain rates as occupancies plummeted following the popular uprising which began a year ago. However the increased operating costs, such as the 10.1 percentage point growth in payroll costs in January, have had a significant impact on the bottom line as the GOPPAR for the month dropped by 58.8 per cent to $34.87 for the month.

Hotels in Sharm El Sheikh achieved occupancy of 50.2 per cent in January which was 18.8 percentage points below the same period in the previous year and ARR of $51.02 which was 23.8 per cent below the previous year. Much like Cairo, operating costs in this resort destination too have increased significantly, including payroll costs which increased from 11.8 per cent in January 2011 to 20 per cent for the current month. GOPPAR for Sharm El Sheikh hotels for January stood at $15.96 registering a drop of 62.5 per cent from the previous year.

Growth in the gross domestic product of the debt-laden emirate is “expected to be over 4.5 percent this year,” said Sheikh Ahmed bin Saeed Al-Maktoum, the head of the Dubai Economic Sector Committee.

The forecast by Dubai’s Department of Economic Development (DED) is also around 4.1 percent for 2012.

This is a “respectable rate” driven by over six percent growth in tourism, and similar rates in trade and manufacturing, in addition to transport, said DED chief economist Mohammad Lahouel.

The growth will continue “despite a continued decline in construction,” he said at the Dubai Economic Outlook 2012 forum.

Lahouel said the final figures on GDP growth achieved in 2011 were not out, though he expected they should be around three percent, while a “little bit over two percent” was achieved in 2010.

Standard Chartered’s Marios Maratheftis agreed with the positive outlook for Dubai, but he put the forecast for growth in 2012 at 2.4 percent.

“We think it is good given that 2011 was a good year,” said Maratheftis, the bank’s head of research for Western Hemisphere.

A slower rate of growth is not bad news because the quality of growth is improving, he added.

“The fundamentals of Dubai are pretty healthy and strong. Construction will continue to be negative, but I think it is good news because focus is shifting towards productive sectors,” he said.

“It shouldn’t be about the rate of growth but about the quality of growth,” Maratheftis added, highlighting that the retail sector “is doing well, if not booming,” while hospitality is also doing very well.

Dubai’s economy contracted in 2009 after being hit by the global financial crisis which dried out international finance and brought its property sector — which grew at break-neck speed for over five years — to a shrieking halt, shedding around 60 percent of its value so far.

But the economy has picked up pace, banking on its developed tourism and retail sectors, as well its traditional trade sector.

The property sector had led Dubai’s growth, but it is now lagging behind as investors walked away from many projects after they saw the value of their investments wiped out, while plenty of residential and commercial space became available in the market.

“We have enough real estate to accommodate growth,” said Marwan bin Galitha, the head of Dubai’s Real Estate Regulatory Agency (RERA), while acknowledging the relegation of property from the sectors leading Dubai’s growth.

Emaar Properties PJSC said today it’s expanding the Dubai Mall, the world’s biggest, by 1 million square feet (92,903 square meters) as retail accounts for a growing share of the company’s income. Nakheel PJSC, the government-owned company that restructured $16.1 billion of debt last year, is adding to its Dragon Mart shopping center and trying to raise funds to build a cluster of restaurants and stores at the tip of its Palm Jumeirah artificial island.

“Most developers are looking to build recurring revenues because there are so few property sales happening right now,” said Patrick Gaffney, an analyst at HSBC Bank Middle East Ltd. “The sectors that are doing best are retail and hotels because of strong tourist arrivals.”

Dubai’s malls and shops have become more attractive after home values fell by more than 65 percent from their 2008 peak while retail sales have been rising since 2009. Developers that don’t already generate significant revenue from shopping assets will struggle to get a foothold in the market because little is being built or sold and banks are reluctant to finance any type of development in the emirate, including retail, Gaffney said.

Retail revenue in the United Arab Emirates probably increased 5.3 percent last year to 113 billion dirhams ($31 billion) Business Monitor International estimated. That will probably rise to 120 billion dirhams this year and 157 billion dirhams by 2015, it said.

Biggest Mall Owner

Majid Al Futtaim Holding LLC, the operator of Carrefour SA stores in the Middle East, is the largest owner of shopping malls in Dubai. The closely held developer this month raised $400 million selling Islamic bonds for the first time as part of a $1 billion program. Last month the company reported an 18 percent increase in revenue in its home market and said 2011 was its most successful year since being founded in 1992.

Majid Al Futtaim priced its $400 million, five-year Islamic bond, or sukuk, at a rate of 5.85 percent on Jan. 31. The yield rose 4 basis points since it started trading this month to 5.66 percent today. That compares with a yield of 7.4 percent for Emaar’s 8.5 percent Islamic notes maturing in 2016. Emaar, Dubai’s second-biggest retail operator, also builds housing and offices.

Share of Income

Emaar reported that 41 percent of revenue and 68 percent of pretax profit came from hospitality properties and leased space including shopping malls in the first nine months of last year. That compares with 24 percent of revenue and 27 percent of profit a year earlier.

“The Dubai Mall is a powerful demonstration of the competencies that Emaar has developed in retail, regarded as one of the core sectors of Dubai’s economy,” Emaar Chairman Mohamed Alabbar said in today’s statement.

Owning the Dubai Mall, with rentable space equivalent to 50 football fields, also helped the company when it used the asset as collateral to refinance 3.6 billion dirhams of debt at a lower price. The expansion announced today will lift the total size of the development to more than 13 million square feet.

Retailers including American Eagle Outfitters Inc., Limited Brands Inc. and luxury watch seller Rivoli Group are opening shops in Dubai as consumer confidence rises. Macy’s Inc., the second-biggest U.S. department-store company, in January 2010 chose the Dubai Mall to open its first Bloomingdale’s store outside its home market.

Left Out

Prospects aren’t as bright for developers that haven’t built up retail assets. Union Properties PJSC, which is mainly focused on homes and offices, this month reported a full-year loss of 1.57 billion dirhams. The company in January handed over ownership of properties including some in Limestone and The Index to settle 1.1 billion dirhams of debt.

Deyaar Development PJSC, partly owned by Dubai Islamic Bank PJSC, has 234 million dirhams of debt coming due this year, compared with about 37.7 million dirhams of profit in 2011. The company had a loss of 2.9 billion dirhams the previous year.

“Even though retail is generally strong, especially at the large malls, we don’t expect many developers to build new ones because funding is tough and there is already a good amount of supply in the market,” Gaffney said. “The areas that will do best are smaller strip malls or supermarkets near housing developments.”

Boost to Economy

Shopping accounted for about 30 percent of Dubai’s gross domestic product last year, Standard Chartered Bank Plc economist Philippe Dauba-Pantanacce estimated. The Dubai Statistics Center said retail and wholesale trade rose by 9.3 percent and hotels and restaurants increased by 4.4 percent in 2010. It hasn’t yet released figures for last year.

Nakheel is in talks with banks to raise at least 300 million dirhams for its first new project since the debt-ridden company received a government bailout in 2009. The Pointe at Palm Jumeirah, across the water from the Atlantis hotel, will include 120 restaurants, 75 shops and landscaped areas for visitors with a view of an offshore fountain.

“The retail sector is strategic for Nakheel,” Chairman Ali Rashed Lootah said at a press conference in January. He added that 60 percent of an extension to Nakheel’s Dragon Mart mall was booked by retailers within a week of its announcement. The company plans to add 1.7 million square feet of retail space and 5,000 parking spaces to the mall.

Fundraising Challenge

Even with a growing retail market, Nakheel may have difficulty raising the money after it received a government bailout and restructured debt, according to analysts including Ahmed Talhaoui, the Abu Dhabi-based head of investment and asset management at Royal Capital PJSC.

“Any issue would have to be at a very competitive yield and probably with a structure that gives some government guarantee,” Talhaoui said in a January interview.

The yield on Nakheel’s 3.8 billion-dirham, 10 percent sukuk maturing in August 2016, fell 114 basis points, or 1.14 percentage points, so far this year to 16.83 percent today, according to data compiled by Bloomberg. That compares with an average yield of 4.45 percent for U.A.E Islamic bonds on Feb. 10, the HSBC/NASDAQ Dubai UAE US Dollar Sukuk Index shows.

Emaar, which opened Burj Khalifa, the world’s tallest tower, in 2010, derived about 23 percent of its 2011 income from retail rents and is now focusing almost exclusively in Dubai on growing sales at its malls, HSBC’s Gaffney said. Tourists visiting the Burj Khalifa’s observation deck can only get there by going through the Dubai Mall.

Ali Lootah, Nakheel Chairman, said: “We are delighted with the new project coming up soon, and the Heritage Island, a family oriented project which includes many facilities of entertainment and culture, aims to bring together family members at cultural, social and heritage-related activities, instilling social values and inherited customs.”

Under the patronage of Shaikha Manal Bint Mohammad Bin Rashid Al Maktoum, President of the Dubai Women’s Establishment, Honorary President of Emirates Marine Environmental Group (EMEG) and wife of Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, the Heritage Island will receive visitors throughout the year, said Major Ali Saqr Al Suwaidi, chairman of the EMEG.

“Developing traditional tourist destinations will promote and sustain our tourist assets,” Al Suwaidi said.

Gassan Al Aridi, Managing Director of Alfa Tour, told Gulf News that the Heritage Island will be an asset to Dubai.

Dubai, United Arab Emirates: Gulf visitors to Dubai Shopping Festival are increasingly-affluent and in search of a compelling combination of high-end experiences that differentiate one premier destination from another, says a global destination promotion expert.

From visits to some of the world’s latest attractions, five-star hotels and top international restaurants to luxury shopping, Dubai’s Shopping Festival is pulling in more buyers spending more money during lengthier stays.

“Dubai’s annual Dubai Shopping Festival has done a great job over the last several years to attract and retain the right types of visitors,” said Dubai-based Mohammed Hafez Marican, Area Director Middle East and Africa of Singapore’s Tourism Board, the group responsible for promoting the world-famous Great Singapore Sale.

“Visitors from the Gulf can relax and satisfy their shopping needs while also absorbing Dubai’s reassuringly-comfortable heritage and culture.  It’s also got a tremendously safe and clean environment, and there really is something here for everyone,” Marican added.

As organizers of one of the world’s most famous shopping festivals, the Great Singapore Sale, the island nation’s tourism board knows what attracts affluent global shoppers – top attractions, premier hotels, excellent dining options, and, of course, luxury brand shopping.

Much like Dubai’s Shopping Festival begun in 1996, the Great Singapore Sale was created by the Singapore Tourism Board in 1994 as an attempt to attract the world’s top-tier tourists, those with discretionary spending power that allows them to stay longer and spend more, particularly in the city’s premier retail establishments, of which there are many.

“We’ve known for a while what attracts top-tier spenders to Singapore, and, more than any other element, it is international luxury brands which draw top buyers to truly global shopping festivals,” added Marican.

Singapore’s Orchard Road is a virtual byword for luxury shopping, and with the recent opening of ION Orchard on the Orchard Road belt, the Great Singapore Sale will also feature an extra 66,000 sq meters of retail offerings at this stylish venue.  This stunningly futuristic mall is home to Dior Homme, Louis Vuitton, and Diane von Furstenberg, among other high-end retailers.

Other Orchard Road neighbours include Paragon, home to Jimmy Choo, Coach, Gucci, and Tods; DFS Galleria Scottswalk with Chanel, Dior, Gucci, Fendi, Ferragamo Salvatore, Burberry, Dunhill, Cartier, Bvlgari, Tiffany & Co., Chopard and Loewe; and Palais Renaissance with DKNY, Gianni Versace and Prada.

“What we are doing differently now is making it even easier for affluent tourists to visit more regularly and stay longer, spending more money on each visit.  To accomplish this goal – particularly with Gulf visitors – Singapore has had to do a better job of highlighting all our other world-class features, namely accommodation, dining, and attractions.”

An ever-evolving destination, Singapore boasts dozens of five-star hotels, among them Shangri-La, Ritz-Carlton, Four Seasons, and St. Regis;  Michelin-starred restaurants, but also trendy spots such as Wild Rocket, Iggy’s Restaurant, and Cut Singapore; and some of the world’s finest entertainment, such as the newly-opened Universal Studios Singapore theme park, Marina Bay Sands and Sands Sky Park, and ArtScience Museum.

The Great Singapore Sale 2012 starts in late May and runs through July.

“We’re all looking at a very healthy, high demand for the festive season,” said Naeem Darkazally, the vice president of sales and revenue at Rotana Hotels, which manages 13 properties in Dubai.

“We’re seeing heavy demand coming from traditional markets, such as the German market, the UK, the Russians, the CIS [the Commonwealth of Independent States]. Also there’s a good demand from leisure groups from China and India.

“In many of our hotels, we’re already fully booked for the New Year period. We are more affordable to more secondary markets, to more layers of societies of different source markets. What’s happening in the Middle East, definitely that creates potential from other leisure destinations.”

In terms of bookings, the company’s hotels in Dubai have 25 per cent more business for the Christmas period up to the first week of January compared with last year.

“Because the demand is so high, of course we’ve been able to moderately increase our average room rates in certain markets,” said Mr Darkazally.

“We’ve also done some creative packaging for people to pick up stays with families. I think we’re seeing a nice increase in RevPAR [revenue per available room].”

He estimated there had been a 15 per cent increase in Russian bookings, saying that this was partly because people were avoiding popular resort destinations in Egypt such as Sharm El Sheikh.

This year as a whole has been very positive for hotels in Dubai.

The Ramada Downtown hotel has reported that its revenues are up by at least 25 per cent year-to-date from a year ago. Occupancy levels are up to 76 per cent this year so far compared with 62 per cent for the same period last year.

The hotel is expected to achieve full occupancy on at least a couple of nights between Christmas and the end of the year and is forecasting an average 85 per cent occupancy for this month, said Wael El Behi, the executive assistant manager at the Ramada Downtown.

“The weather factor is important because the weather is great now in Dubai and people are looking to run away from the cold weather in Europe.”

The hotel continues to attract visitors from GCC markets, while guests from South America, Russia and the UK are also helping to boost business for the holiday season, he added.

“For the month of January, with the Dubai Shopping Festival taking place, we are witnessing a very good pick up, especially the third week of January, with the GCC holidays. It looks like a good start to the year.”

Although corporate business slows down during the holiday season, for New Year and with the Volvo Ocean Race’s arrival in Abu Dhabi coinciding with the start of the year, hotels in the capital look are likely to be busy.

“We’re expecting sold-out dates both in Dubai and Abu Dhabi for New Year,” said Raki Phillips, the area director of sales and marketing for Fairmont in the UAE.

Al Bustan Centre & Residence in Dubai has had a 30 per cent growth in revenues this year, the hotel said.

Moussa El Hayek, the chief operating officer at the Dubai hotel, said that as well as growth in the numbers of Russians coming in, there were also more Chinese groups, and charter flights from Bulgaria and Poland were bringing in more guests. The hotel had managed a slight increase in average room rates, he added.

“We believe that next year is going to be another rewarding year,” said Mr El Hayek.

Eggenschwiler at the third Dubai-Hamburg Business Forum talked to Khaleej Times about the importance of Dubai Airport and Emirates airline to their business. “For the next two to three years the focus is on stabilising the current capacity increase on Emirates’ Dubai-Hamburg route,” 
he said.

“Whether for Dubai-bound, or for transfer passengers, Dubai Airport is a world class facility, providing good connections into the Asia-Pacific region as well as Africa and the Middle East. Emirates airline is quality and its pricing scheme is very competitive, so business and leisure passengers from Hamburg benefit from this situation,” he said responding to a question on benefits to German passengers.

Citing Emirates airline’s orders for 90 Airbus A380, he said it secures overall 13,000 jobs in Germany. Most of these jobs are located in Hamburg and Northern Germany, he added.

Hamburg Airport is very much interested in keeping a close relationship with Emirates airline. The airline has transported nearly 1,250,000 passengers since taking up the Hamburg service in March 2006. The average growth per year on the Hamburg-Dubai route is a strong 15.6 per cent.

Regarding new markets for the Hamburg Airport, he hoped to see more frequencies and eventually four weekly non-stop flights between Shanghai and Hamburg. Furthermore, Hamburg is aiming to acquire non-stop services to Asian destinations such as Beijing, Hong Kong, Bangkok and Singapore, he said, adding that in the United States further capacity to New York and new non-stop services to Chicago, Washington and Miami are also on the list.

“It is our objective to raise the general awareness of Hamburg’s touristic potential as well as being a flourishing business destination in the northern part of Germany,” he commented on the forum.

In the period, January to September 2005 Hamburg welcomed 4,768 travellers arriving from the Gulf region. In March the following year Emirates started to fly Dubai-Hamburg non-stop. In 2010, between January and September, Hamburg counted 10,778 arrivals.  “This means the number of travellers from the Gulf region arriving in Hamburg has more than doubled within five years,” he said. He mentioned that Emirates airline started a second daily frequency flight to Hamburg on September 1, 2011 and to promote this new service Hamburg Airport supports Emirates with marketing measures such as events for travel agencies, PR activities and advertising in the Hamburg market.

“For Hamburg Airport we forecast in total of 13.5 million passengers by the end of 2011,” he said, adding that the Emirates route between Hamburg and Dubai should see 255,000 passengers by the end of this year and next year around 350,000. Emirates is the sixth largest airline in Hamburg. “To secure this growth Hamburg Airport has excellent contacts with Emirates and supports their marketing activities,” he added.

The number of hotel guests staying in Dubai increased by 11 per cent in the first three quarters of the year and revenuewas up 19 per cent, new figures showed yesterday.

The sector has experienced a dramatic lift, due in part to political instability in other parts of the region.

Dubai’s hotels received 6.6 million guests in the first nine months of the year, up from more than 5.9 million between January and September last year, the Dubai Department of Tourism and Commerce Marketing (DTCM) said.

“With what’s happening in the Middle East, I think it’s a safe place to come,” said Peter Mansourian, the general manager of the Grand Millennium hotel in Dubai. “Nobody wants to go to Bahrain these days, so the Saudis are coming here.”

Total revenue of the emirate’s hotels and hotel apartments increased by 19 per cent to Dh10.96 billion (US$2.98bn), according to the data. Dubai has also benefited from its affordability compared with the peak of the boom in 2007 and 2008.

The construction of new hotels has vastly increased the number of rooms.

“You’ve got a larger choice compared to some years ago,” said Mr Mansourian. “You can stay from Dh150 up to more than Dh1,000 a night.

“Tourists are coming to see the Burj Khalifa, Burj Al Arab, they’re coming for the shopping. Dubai is a stopover. Next Sunday is the Grand Prix in Abu Dhabi. There’s a lot of things happening in the Emirates.”

Hoteliers say tourist numbers from the GCC and China in particular have grown this year.

Occupancy has risen, despite growth in the room supply in the emirate, the data showed.

“The number of hotel establishments increased by 1 per cent to 573 while the total hotel rooms and flats jumped up by 7 per cent to reach 73,522,” the DTCM said. “The average occupancy levels of hotel rooms and flats increased by 5 and 7 per cent, respectively, and stood at 72 per cent and 74 per cent, respectively.”

Globally, tourist arrivals were up by 4.5 per cent in the first eight months of the year to a total of 671 million compared with the same time last year, according to a report released yesterday by the UN World Tourism Organization. But growth is expected to soften in the remainder of the year, it said.

Tourism arrivals in the Middle East as a whole were down by 9 per cent in the first eight months of the year, while arrivals in North Africa were down 15 per cent, according to the data.

“In spite of the current situation in the Middle East, some destinations such as Saudi Arabia and the United Arab Emirates continue to grow steadily,” the report stated.