Dubai top performer in hotels sector
Dubai, May 4, 2014
Dubai has retained its status as the best performer among major markets in the Middle East when looking at overall hotel performance, thanks to its increasing global popularity as a destination backed by the government’s pro-tourism initiatives, said a report.
There has been a 11 per cent increase in the number of tourists who visited Dubai in 2013 compared to the previous year, according to 2014 JLL Mena Hotel Intelligence Report which was released today (May 4) for the Dubai Market at the Arabian Hotel Investment Conference (AHIC).
The RevPAR is expected to continue growing in the resort areas and central business district (CBD) which includes Downtown Dubai, Business Bay, the Dubai International Financial Centre area (DIFC) and Sheikh Zayed Road, it said.
Deira and emerging districts are moving towards stabilisation, with slower year-on-year growth, the report stated.
According to JLL, Dubai has strengthened its position as a leading tourism destination in the Middle East due to its ease of access, quality branded hospitality offering, modern infrastructure, leisure and entertainment options and safe environment.
The UAE has benefitted to an extent from the political instability in some Middle Eastern countries, as international tourism traffic has been redirected from other regional destinations to Dubai, it stated.
JLL pointed out that the positive trend in tourism was expected to continue in coming years and Dubai would retain its status as the UAE’s primary tourist hub by expanding its conferencing and business facilities, expanding leisure entertainment options and maintaining its regional retail dominance.
Dubai saw a seven per cent increase in hotel guest arrivals in 2012 and realised a CAGR of 9.7 per cent between 2009 and 2012. According to DTCM, 2012 saw over 14 million room nights. This increase in tourist arrivals has helped keep occupancy high despite the rapid expansion of hotel supply.
In 2013, Dubai recorded an average occupancy of 80 per cent, showing an uplift of three per cent compared to 2013. Tourist growth continued in 2013, with more than 11 million tourists visiting, up 11 per cent from 2012.
The average length of stay reached 3.89 days, up from 3.82 in 2012. The average length of stay has increased at a CAGR of 7 per cent since 2010, stated the report.
According to JLL, the city-wide occupancy was expected to increase slightly in the short-term, with the 80 per cent occupancy in 2013 showing growth from the 2012 year-end 78 per cent occupancy.
The average rates are expected to stay relatively stable for the coming period. New 4-star and 5-star projects are expected to increase competition in the upscale and upper-upscale segments, it added.
Developers are optimistic about building in Dubai, and more than 24,000 quality rooms and serviced apartments are expected to enter the market by the end of 2017, in addition to larger master planned projects such as Mohammad Bin Rashid City and Deira Islands that are expected to include hospitality components.
Most major brands have a presence in Dubai, and the city is home to some major international brands’ flagship properties including the newly-opened Sofitel the Palm, Conrad and JW Marriott Marquis, said the property expert in its report.
Chiheb Ben-Mahmoud, the executive VP (Head of Hotels & Hospitality Group), Middle East & Africa at JLL, said: "Dubai has strengthened its position as a leading tourism destination in the Middle East due to its ease of access, quality branded hospitality offering, modern infrastructure, leisure and entertainment options and safe environment."
"Long term hospitality development in Dubai has been bolstered by the vision of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, for Tourism for 2020, supported by the planning and implementation efforts of DTCM," he added.
The emirate’s rapid growth is expected to continue, helped in part by major infrastructure and development projects, including airport improvement and expansion, the tram system, Dubai Pearl, Mohammed Bin Rashid City and completion of the Trade Centre District project.
The airport and tramway infrastructure projects will facilitate transit and city access. Plans for Dubai Pearl and Mohammed Bin Rashid City include extensive entertainment options, residences and hospitality accommodations, said the report.
Chiheb Ben-Mahmoud pointed out that the development of conference facilities will increase Dubai’s appeal as a business destination, and the development of entertainment venues will boost its appeal as a leisure destination.
Developers, he said, are optimistic about building in Dubai, and more than 24,000 quality rooms and serviced apartments are expected to enter the market by the end of 2017.
"While the majority of the supply expected to open is concentrated in the upscale and upper-upscale segments, attaining Dubai’s goal of attracting 20 million visitors by 2020 will require the emirate to also cater to tourists seeking budget friendly accommodation formats," he added.-TradeArabia News Service