Dubai’s hospitality industry has a bullish outlook for 2023, KPMG report reveals

Dubai’s YTD November average daily rate increased from Dh550.87 in 2021 to Dh674.25 i.e 22% in 2022

by

Somshankar Bandyopadhyay

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Published: Thu 12 Jan 2023, 4:17 PM

Dubai’s hospitality industry has made a strong post-pandemic rebound, with leisure and business trips, including MICE (meetings, incentives, conferences and events) on an upward growth trajectory in FY22, a report showed.

The latest KPMG Dubai Hospitality report revealed that Dubai registered the highest hotel occupancy rate in 15 years by the end of Expo at 96 per cent, with the emirate’s tourism sector contributing $29.4 billion to the economy in 2022.


“The UAE now hosts one of the richest hospitality markets in the world with an expected 25 per cent growth in the industry by 2030 and 40 million new visitors staying at hotels in Dubai by 2031.2 Dubai’s hospitality sector achieved a total of approximately 150,000 rooms by the end of 2022,” the report said.

The government’s robust Covid-19 response plan and the hospitality industry’s commitment to complying with government health and safety requirements elevated the UAE’s position as one of the safest countries in the world, with 90 per cent of surveyed respondents expressing confidence in the implementation of sensitisation policies across hotels in Dubai. This enhanced guest sentiment is reflected in hotel occupancies, with 92 per cent of consumers keen to stay in a hotel in Dubai in 2022, representing a 37 per cent increase from the previous year’s results, the data showed.


Sidharth Mehta, Partner and Head of Real Estate, KPMG Lower Gulf, said: “The Dubai’s hospitality industry has witnessed remarkable growth in 2022 – driven by the government’s forward-thinking vision to address the needs of all hospitality stakeholders. Furthermore, the UAE is investing around $32 billion to acquire 48,000 more hotel rooms to bring it to a total of 200,000. These developments place the UAE in an enviable position to navigate travel and hospitality demands in 2023, equally driving economic growth by creating employment opportunities.”

India remained the highest source market for Dubai tourism, with 1.4 million visitors from the country visiting the emirate in the frist 10 months of the year. The other top four source markets were Oman, Saudi Arabia, the UK and Russia.

The UAE also had the highest occupancy rate among GCC countries in 2022. For the year-to-date November 2022, Dubai’s occupancy rate increased from 64.7 per cent to 72.5 per cent. In March 2022, the occupancy in the UAE was the highest in the world at 85 per cent, 34.2 per cent higher than the global rate.

Meanwhile, the average daily rate (ADR) grew significantly from Dh550.87 to Dh674.25, i.e. by 22 per cent. Revenue per available room (RevPAR) increased from Dh356.42 to Dh488.79, from YTD November 2021 to 2022.

Among the other notable trends in 2022 were digitalisation and sustainability, with operators indicating that they were priority areas for them. Many are also moving progressively away from plastic bottles, reducing carbon emissions, and promoting inclusion and diversity. Meanwhile, contactless check-in, with customers receiving their keys in their mobile phones, and other emerging technologies are set to dominate the hospitality industry in 2023.


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