Dubai Hotel Industry in Tailspin From Coronavirus Outbreak

(Bloomberg) --

Dubai’s hotel performance has worsened in recent months, as the coronavirus outbreak takes a toll on global and regional economies, according to preliminary data from STR Inc.

Occupancies decreased for 37 consecutive days from Feb. 1 through March 8 compared to the same period last year, STR analysts noted in the March 17 report. The steepest declines happened in the most recent of those days.

Initial data in February showed occupancy rates retreated about 9.4% in the emirate, with revenue for available rooms slipping close to 23%. Consumer prices for the hospitality sector -- including hotels and restaurants -- in the United Arab Emirates, which Dubai is a part of, dropped 1.3% in 2019.

Even before the virus eliminated most demand, Dubai was hard hit by an oversupply of newly built hotel. rooms that battered occupancy and average room rates.

Dubai hotels’ woes are symptomatic of a global phenomenon. In the U.S., hotels and travel firms sought $250 billion from the federal government to help cope with a virtual travel shutdown. Christopher Nassetta, the chief executive officer for Hilton Worldwide, expected global occupancy rates at 10% to 15% because of the pandemic.

Standard Chartered revised down its 2020 economic growth projection for the U.A.E. to 1% from 2.1% earlier because of the virus and lower crude prices.

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