Low occupancy rates have prompted some hotels in Dubai to either lay off workers or freeze their hiring plans, a report from Gulf News said.
A leading luxury resort, Atlantis, The Palm, for instance, has let go of at least 27 employees, although the report said none of the resort’s waiters, bellhops and other front-line personnel were affected by retrenchments. A spokesperson for the company confirmed that they have made changes to staff structure and the layoffs were part of the changing “market dynamics.”
“We have revised our staffing structure by approximately 27 positions to streamline our operations and create additional efficiencies in response to evolving market dynamics,” said the spokesperson.
The Arabian Courtyard Hotel and Spa, on the other hand, has said it is freezing new hiring due to the downtrend and is monitoring the situation.
“Occupancy and revenue has dropped. We shall evaluate the situation and, if needed, we may adopt certain contingency plan, including extending leave, granting local leave and ultimately reducing staff as a last option,” Habib Khan, general manager at Arabian Courtyard Hotel and Spa, told Gulf News.
The dramatic decrease in hotel occupancy in Dubai has been blamed partly on decline in oil prices in the last quarter of 2014. The slowdown has been attributed to the falling number of visitors from Europe, notably Russian travelers whose spending power has eroded with the devaluation of euro against the greenback. Other factors considered in the slowdown are the regional instability and growing supply of hotel rooms.
Dubai’s smaller hotels, however, said occupancy levels are still looking good and did not resort to reduction of manpower.
Moussa El Hayek, COO of Al Bustan Centre and Residence, noted that there has been a decline in the number of visitors from Russia and broader CIS (Commonwealth of Independent States ), but their current occupancy level is still 12 per cent higher than last year.
After the steady decline in oil prices in 2014, Dubai’s hotels’ occupation rate have dropped by 1.9 per cent in February, acording to STR Global.