Budget sector suffers


Nearly 20 small-size hotels and hotel apartments have closed in Dubai since the start of this year for various reasons, including their inability to withstand cut-throat competition, non-payment of licencing fees, rental disputes, visa restrictions on certain categories of tourists and immoral acts, local media reported.

Industry sources said a few more properties are showing signs of going the same way as tourists are being attracted by low room tariffs offered by several well-established hotels and hotel apartments in order to remain afloat.

They said a majority of these properties, rated by the Department of Tourism and Commerce Marketing (DTCM) as "one star" and 'standard', are located in the commercial business districts of Deira and Bur Dubai.

"Like several other businesses, these low-budget hotels have found themselves caught in the whirlpool of economic slowdown," an industry analyst said.

Industry sources said most of the budget hotels were just breaking even for the past two years, but the situation deteriorated sharply this year.