Dubai hotels lead Mideast recovery

Dubai hotels will continue to lead the ongoing robust recovery in the Middle East hotel sector in 2022 with occupancy levels as high as 77 per cent.

Hotels in Dubai Creek/Festival City and Dubai Marina/JBR areas will be the busiest with the highest occupancy rates, according to the Mena Hotel Forecast by Colliers.

“The impact of Expo 2020 has had a positive impact on all markets in the UAE, while the FIFA World Cup Qatar 2022 is expected to result in overspill demand to the key transit hubs in Dubai and Abu Dhabi,” Colliers said in its latest report.

However, rising instability in key CIS source markets is expected to suppress demand, with the largest impacts expected in Dubai and Ras Al Khaimah, it said.

“Given the diversity of source markets for the UAE, additional hotel demand may be induced from alternative markets at a lower price positioning,” Colliers said in its report.

In Dubai, across almost 800 hotels, occupancy rates in Dubai have averaged 76 per cent throughout the first half of 2022. The achievement makes Dubai the world leader for hotel occupancies, head of New York, London, and Paris, according to the recent tourism data revealed by Dubai’s Department of Economy and Tourism (DET).

Dubai has welcomed 6.17 million international overnight visitors up to May 2022, a 197 per cent YoY increase. The 76 per cent occupancy figure was maintained from January to April 2022.

Hotels in Abu Dhabi, Sharjah, Fujairah and Ras Al Khaimah also have recorded above 60 per cent occupancy

Dubai is building on the massive momentum generated by the hugely successful Expo 2020 to drive growth across all its tourism pillars from cultural to culinary experiences. “As we look ahead to the remainder of 2022 and beyond, we will harness the key elements that have ensured the industry’s steady growth year after year since we reopened to international visitors in 2020 – providing an unparalleled diverse destination offering that offers unique value and memorable experiences for our guests,” said Helal Saeed Almarri, director general of DET.

Christopher Lund, the executive director, Colliers, said most markets would have improved on their year-on-year performance in the second half of 2022. “However, increased geopolitical tension, a rising price of oil, and a significant increase in inflation have affected key inbound source markets for the region resulting in a slower than expected recovery. When factored with an increase in outbound travel from the region, this has reduced the rate of recovery in domestically oriented markets.”

“While ongoing monitoring of the Covid-19 pandemic by key touristic stakeholders continues to influence how markets recover, consumer confidence will be the principal determiner of growth. A transparent and consistent approach to the easing of Covid-19 restrictions to support further recovery and growth remains a key factor in improvement,” said Lund.

In the Middle East, the sharpest jump in occupancy was demonstrated by hotels in Makkah at 106 per cent and Madinah at 80 per cent due to the restart of the pilgrimage travel while negative occupancy growth was recorded by hotels in Sharm El-Shaikh and Alexandria, at 12 per cent and 7.0 per cent respectively.

“The Riyadh Season and growing consumer confidence has benefitted both the Riyadh and Jeddah markets. While positive indications on the return of pilgrim demand has improved the outlook for the Makkah and Madinah markets. The rising price of oil has historically led to increased corporate demand in Al Khobar/Dammam, however, an increase in outbound travel may reduce this impact,” said the report.

Cairo has maintained its rate of growth, however, leisure-oriented markets have experienced a marked reduction of demand stemming from increased competition in the region as well as travel uncertainty from the key CIS markets. The exception here is the Hurghada market which has maintained its levels of demand.

Doha has experienced a slight decrease in occupancy over H1 2022 compared to the previous year. However, Fifa World Cup Qatar 2022 is expected to result in super-normal levels of demand for its duration in the final quarter of the year.

— issacjohn@khaleejtimes.com

• Dubai