Events season a boon for UAE's hospitality sector

One British tourist waxes lyrical at what's going on in Dubai. He was attending the Sandance festival. But there are plenty of other events taking place, and in the capital too - so tills in the hospitality sector are ringing in perfect harmony.

The Ferrari driver Fernando Alonso practises during the Formula One Abu Dhabi Grand Prix last year. Caren Firouz / Reuters

Adam Smith flew into Dubai on Friday morning with the English rapper Dizzee Rascal in tow.

Unfortunately for Mr Smith, 27, the pair were not travelling together - it just so happened they were on the same flight.

But Mr Smith did go to the emirate to see the rapper and a host of other music acts at the Sandance festival, which last weekend helped to kick off the busy tourist and events season in the UAE.

"I didn't expect Sandance to be anywhere near the scale it was," says Mr Smith, who is from London. "You have the ability to watch heavy dub step and then go and chill on the beach. It's unreal. Unbelievable vibes going down."

About 10,000 partygoers descended on the beach at Atlantis The Palm for the Sandance festival, which has now become one of the signature events in the Emirates. The first was held two years ago.

Greg Dufton, the event's organiser, says Sandance is attracting visitors from around the region and tourists such as Mr Smith are now timing a trip to the UAE to coincide with the music festival.

"It's difficult to tell but we are definitely getting more and more of a following of international people," says Mr Dufton. "It's being helped by people who live here. People have friends that are coming and timing it around the festival."

Across the board, hoteliers, hospitality managers and events planners are all predicting a bumper season for revenues in the run up to the New Year.

This year could even be the best yet for visitors, helped by the bustling events season.

In Dubai, revenues at hotels soared 22 per cent to Dh9.7 billion (US$2.64bn) in the first half of the year compared with the same period last year, as guests spent more time on sunloungers and indulged in more room service.

Likewise in Abu Dhabi, guest numbers are up 15 per cent so far this year and expected to reach 2.3 million for the year as a whole.

"It's a very positive season. The Emirates is alive," says Faisal Al Sheikh, the events manager for the Abu Dhabi Tourism and Culture Authority. "Back-to-back events makes the destination attractive and gives choice for all visitors."

Indeed, the Abu Dhabi Film Festival also began over the weekend, while a long list of rap and R&B stars are performing at the Atelier festival this weekend in Dubai.

There is a Creamfields dance festival in Abu Dhabi in December and there is another Sandance festival in Dubai in three weeks.

And coming up soon is the Formula One Abu Dhabi Grand Prix and the rest of the high-profile sporting events such as the Dubai Rugby Sevens and the Race to Dubai golf tournament, all driving tourist traffic.

"The word is 'great'. The expectation for the months between October and December is truly phenomenal," says Haitham Mattar, the vice president of sales and marketing for Hilton Worldwide. "There are all the events that are happening between concerts and film festivals. It's all ramping up."

The hospitality market is forecast to grow at three times the rate of GDP for the next few years, with revenues reaching $4.9bn this year and growing to $7.5bn by 2016, according to Alpen Capital's latest GCC industry report.

"Yes, this is going to be a great season for us," says Omer Kaddouri, the chief operating officer for Rotana Hotels, which has 30 properties in the Emirates. "Is it going to be the best year ever? It depends on how you look at it. We had a very good beginning of the year. We are hopefully looking at the last quarter being as strong."

In Abu Dhabi last week, Rotana opened one of its Centro-branded hotels, which is already 60 per cent booked.

However, property analysts say Dubai and Abu Dhabi, the country's two biggest markets, should be viewed as completely different from each other.

The capital is now considered to be oversupplied with hotels, despite the huge influx of guests, and the level of occupancy in its hotels is expected to fall before eventually rising again. Meanwhile, occupancy in Dubai keeps edging up, according to industry reports.

Anantara's Eastern Mangroves hotel, which opened in June in Abu Dhabi, is regarded as an acid test for the overcrowded market. The hotel, however, reports being 85 per cent booked for the week preceding the Formula One.

"We are counting on good business for the F1," says Nancy Nusrally, the area public relations manager for Anantara. But for next month as a whole and December, Eastern Mangroves is currently 42 per cent and 35 per cent booked, respectively.

Compare that with hotels in Dubai, where hoteliers, such as those at the Ramada Downtown, Hilton Jumeirah Beach and Al Bustan are confident they can fill their properties.

"The last quarter of 2012 is expected to perform very well especially during the major holidays like Eid Al Adha, Christmas and New Year. Therefore we are expecting that our occupancy for the last quarter will range between 85 per cent to 100 per cent," says Moussa El Hayek, the chief operating officer at Al Bustan Centre & Residence.