Dubai tops MEA cities for most hotel rooms under construction
Dubai has topped the list of cities in the Middle East and Africa (MEA) region, with the highest number of hotel rooms currently under construction, new data by STR has shown.
Dubai stood its ground with 41,846 rooms in construction - which is 41.2 per cent of existing supply. STR data also indicates that there are 53 hotels five-star hotels in planning or construction with opening dates before 2020. Makkah follows Dubai in second place with 25,619 rooms in construction, followed by Doha with 10,228 rooms in construction. STR's Middle East and Africa hotel supply development update showed that the Middle East room construction total represented a 36.3 per cent increase compared with April 2017. The Africa room construction total represented a 13 per cent decrease compared with April 2017.
Timothy Kelly, GM and senior vice president of Operations, Atlantis The Palm, Dubai, told Khaleej Times that there is going to be a stable growth in visitation numbers in the coming years. "We expect to see a four per cent growth into Dubai over the course of this year. More hotels rooms are also coming into the market as well, but there is a little bit of a gap with regards to visitation and growing hotel inventory. Currently, there is enough supply, but with Dubai Tourism's plans of increasing the number of visitors in the coming years, we will need to increase the supply further."
"Despite facing challenging market conditions, Dubai's hospitality sector remains amongst the top performers in the Middle East, underpinned by the emirate's positioning as a regional commerce hub and the development of world class demand generators. Visitation has for the most part continued to grow from key source markets, with India and China notable standouts, and Russian visitation continuing its positive momentum from the previous year. We remain optimistic about the future outlook of the sector, and envisage that the market will once again stabilise once the rate correction has run its course," added Ali Manzoor, associate partner, and head of Hospitality at Knight Frank.
According to Dubai Corporation of Tourism & Commerce Marketing, Dubai is currently home to 104 five star-hotels. Dubai International Airport recorded 83.7 million passengers in 2016, up 26 per cent from 2014. In 2017 this has increased further to over 88 million passengers. In the hospitality sector, the total number of hotel keys per resident is highest at 29.9 per 1,000 people in Dubai, compared to our selected hub cities. Paris is the next highest with 17.6 keys per 1,000 people.
According to a comprehensive study of the market by Dubai Tourism, the emirate's room supply is set to reach 132,000 by the end of 2019, growing at a two-year CAGR of 11.1 per cent. Meanwhile, occupancy levels are forecast to remain at an extremely healthy 76-78 per cent despite growth in capacity, maintaining the attractiveness of the sector to hotel investors and developers. The strong competitiveness of the sector is set to continue to be fuelled by increases in Dubai's growing international overnight visitation and targeted increases in length of stays, supported further by recent and upcoming tourism attractions and experiences.
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