The local economy has again been boosted by this week’s Gulfood Exhibition. With more than 80 countries represented and 3,800 exhibitors, the event is the biggest to date. Further good news for Dubai including its hotel sector.
According to a recently published 2011 report, Dubai hotels outperformed other markets in the Middle East with rises in their Revenue, Occupancies and Room Rates. It is interesting to see that the average RevPar (Revenue per Available Room) came in at US$ 174 whilst beach front properties showed an even higher return of US$ 255. The 2012 outlook is even brighter!
Dubai International Capital (DIC) bought Travelodge in 2006 for close on US$ 1 billion. The company has nearly 500 hotels located primarily in the UK, but also in Ireland and Spain. Despite a 16% jump in Revenue, in 2011, to over US$ 570 million and Profit rising 20% to around US$ 85 million, it has still been forced to replace an existing US$90 million medium term loan facility.
The Dubai Duty Free Tennis Championships also started this week with the WTA US$ 2 million extravaganza featuring six of the top ten lady players. The following week will see the men and the likes of Djokovic, Federer and Murray. Not only will this increase the demand on hotel rooms, it will give an unrivalled marketing opportunity as 400 million television viewers watch the action from Dubai.
Whilst on the subject of tennis, it was not unsurprising to see that Emirates Airlines has signed on as the title sponsor of the US Open tennis tournament. The deal – estimated at US$ 90 million – was for seven years and included nine other events leading up to the last grand slam event of the year. Furthermore Emirates becomes the event’s official airline.
Last financial year, Emirates Group posted Revenue returns of US$14.8 billion (and Net Profit of US$1.6 billion) and September 2011 half-yearly figures saw a year on year 15% hike to US$ 8.3 billion. In comparison, the total 2011 revenues of Dubai Taxi Corporation showed a 22% year on year improvement to just under US$ 0.29 billion. Last year, DTC drivers made over 62 million trips and carried 125 million passengers which slightly more than the 31 million passengers flying Emirates last year!
Sheikh Ahmad bin Saeed Al Maktoum is not only the Chairman of the Emirates Group but also holds the same position on the Dubai Supreme Fiscal Committee. At the recent Economic Outlook 2012 conference he confirmed that he expected Dubai’s GDP to grow by at least 4.5% this year well up on the 3% recorded in 2011. Last year, trade, logistics, transportation and tourism accounted for almost 60% of Dubai’s GDP. This is a pointer on how well the Dubai economy is holding up during the current economic malaise.
The Dubai Financial Market General Index continues to defy gravity and is now trading at 1596 – a mammoth15.93% up since the start of the calendar year.
The Greek Tragedy continues despite agreement on a US$ 170 billion rescue deal for the embattled home of democracy which also received a private creditor debt write-off worth of around US$ 140 billion. It does not take a genius to see that this deal is dead in the water from the outset and only a matter of time before this tragedy turns to farce.
The Iran crisis continues with no end in sight and the possibility of future conflict has seen oil trading near its peaks of the past year. Currently Brent crude is trading at US$ 119 but don’t be surprised if oil does pass its all-time highs during the year.
Any further deterioration in either of these areas will have a negative impact on the global economy – including that of Dubai.