Faster UAE hotel occupancy spike to lead Mena rebound in 2021

Dubai - Markets expected to continue benefiting from ongoing tourism initiatives, upcoming mega projects and domestic tourism

The recovery in the Middle East and North Africa’s hotel sector, which has started in the fourth quarter, will pick up pace through 2021 with the industry in the UAE and Saudi Arabia rebounding at a faster rate, according to Colliers International.

In its latest Mena Hotels Forecast, the property consultancy said while there is a lot of uncertainty in the market regarding the expected performance of hotels, it forecast assumes faster recovery for the UAE and Saudi markets.

“Markets in the region have slowly started to ease restrictions, with the reopening of hotels, malls, parks and beaches. While we are observing the beginning of a recovery in Q4, in line with Colliers Mena Hotel Market Survey results, the improvements in the markets are expected to be more evident as we turn the corner into 2021. As international tourists begin to return, the focus for hotels will remain on capitalising on the domestic market [families and solo travellers] in the short term,” Colliers said.

The UAE’s Dubai Creek/Festival City hotels are expected to register a 41 per cent occupancy rate in 2020, reflecting a drop of 49 per cent year-on-year in occupancy variance.

In 2021, it is expected to record 66 per cent occupancy with an increase of 61 per cent in occupancy variance in 2021.

Hotels in DIFC-Sheikh Zayed Road posted 40 per cent occupancy rate, a drop of 49 per cent year on year in 2020. In 2021, these neighbourhood hotels are expected to register 65 per cent occupancy, up 63 per cent.

Dubai’s Palm Jumeirah hotel market is expected to register a 39 per cent occupancy in 2020, down 50 per cent. In 2021, hotels in this area are expected to post 65 per cent occupancy, up 64 per cent.

Hotels in the Dubai Marina-JBR area are expected to a record 43 per cent drop in occupancy at 47 per cent in 2020. This will recover faster in 2021 with occupancy reaching 67 per cent, up 44 per cent.

Abu Dhabi beach hotels will close 2020 with an occupancy of 48 per cent, down 28 per cent year on year, but show a rebound in 2021 with occupancy jumping by 16 per cent to 56 per cent.

While the UAE has benefited from the build-up to the Expo with the actual event expected to start in the fourth quarter of 2021, Saudi Arabia witnessed some movements from restricted pilgrim access to the holy cities of Makkah and Madinah during the holy month of Ramadan and Haj.

Mena markets are expected to continue benefiting from ongoing tourism initiatives, upcoming mega projects and domestic tourism.

— issacjohn@khaleejtimes.com