Dubai hotels on course for post-pandemic rebound

Unsplash/Nick Fewings

• Average occupancy for Dubai hotels expected to reach 80 percent
• Hotel daily rate grew to $536 in 2022, from $415 in 2019
• International travel accounts for three-quarters of revenue

Dubai’s hospitality sector is forecast to return to pre-pandemic levels this year as the number of international tourists staying at hotels continues to rise, industry experts predict.

A report by Zoom Property says that the occupancy rate in Dubai would reach an average of 80 percent this year, in addition to a steady increase in the average daily rate (ADR) and revenue per available room (RevPAR).

• Dubai redeems $750m Islamic bond and repays $300m
• New Riyadh downtown could add $48bn to Saudi’s non-oil GDP
• Omanis buy into Gulf shopping mall culture

“While the occupancy level was 2 percent below 2019, the pre-pandemic era, the high ADR and RevPAR demonstrate a strong position of the sector,” Ata Shobeiry, CEO of Zoom Property in Dubai said.

“ADR showed a growth of nearly 34 percent, while RevPAR also made a jump of a little over 31 percent. I believe 2023 will follow suit and record even higher figures as Dubai continues to attract tourists from across the globe.”

Dubai had 14.36 million international overnight visitors in 2022, a year-on-year increase of 97 percent, according to data published this month by the Department of Economy and Tourism (DET).

While this is still 14 percent below 2019’s 16.73 million, the revenue figures for hotels in the emirate were stronger.

DET data found that ADR increased from $415 in 2019 to $536 last year, resulting in RevPAR rising to $391, up from $312 in 2019.

“The performance of our industry in 2022 shows the extraordinary progress made by the city over the past two years,” Helal Saeed Almarri, director general of the DET, said.

“While the global economy remains in a state of flux, Dubai has emerged as a clear leader in the tourism industry.”

The surge in visitors also saw Dubai International airport this week report a 127 percent rise in passenger traffic to 66.1 million in 2022. This is above the airport’s own projection of 64.3 million, leading it to set a target of 78 million for 2023.

Simon Leigh, managing director for the Middle East and North Africa of Premier Inn, the UK’s largest hotel brand, described 2022 as a record year for the company in the region.

“With the return of live and in-person events, the peak travel season in full swing and an uplift in visitors from China since borders reopened, it’s been an equally superb start to 2023,” he said.

“All indications point towards another bumper year for Dubai’s hospitality and tourism sector.”

Global Hotel Alliance (GHA) in the UAE reported this week that performance indicators had exceeded 2019 levels in the final quarter of 2022, and all signs were that the global travel sector was in full post-pandemic recovery mode.

GHA data showed that in 2021 domestic travel dominated, with staycations proving popular, but in the final quarter of 2022 international travel accounted for 70 percent of total revenue, which it said is on a par with 2019 figures.

The alliance found that the UAE retained its top spot as the most preferred stay destination among the members of the GHA Discovery membership programme.

Globally, the GHA’s figures reported that the US was the top feeder market for hotel guests, followed by the UK, Spain, Germany and Australia. While China was ranked sixth, it is expected to rebound back to the top spot in 2023 after easing Covid-19 travel restrictions in December.

Despite the positive outlook for Dubai’s hospitality sector and in the wider UAE, Dimitris Manikis, president of Europe, Middle East, Eurasia and Africa at Wyndham Hotels and Resorts, said the global economic slowdown is likely to have an impact in the region.

“When we look at the financial forecast for this year, many challenges lie ahead,” Manikis said.

“Central banks across the world are increasing interest rates in response to rising inflation. The most immediate effect during a financial squeeze is the reduction in non-essential spending.

“Understandably, this raises alarm bells for our sector as reduced levels of tourism are a common side effect of economic insecurity. 

“For all the uncertainty that 2023 may bring, I think that the industry can move forward on a positive note, secure in the knowledge that we weathered the storm brought about by Covid-19, particularly in the UAE where the government’s innovative and adaptive vision has helped propel the country into the top 10 global tourism destinations.”