Dubai hotels see growth in supply and demand

Hotel rooms are being competitively priced in an effort to stimulate demand and keep up with accelerating room supply.

Dubai's hospitality industry witnessed a significant growth in both supply and demand, driven by preparations for the Expo 2020 event, new data has shown.
According to STR's preliminary August 2019 data for Dubai, the emirate's hospitality sector witnessed a 7.6 per cent year-on-year growth in supply, as well as a 7.4 per cent year-on-year growth in demand. Occupancy during the period fell 0.2 per cent to hit 68.5 per cent, and average daily rates also dropped 12.5 per cent to reach Dh389.11. Revenue per available room (RevPAR)also recorded a drop of 12.6 per cent to Dh266.57.
Analysts at STR noted that as the market prepares to host Expo 2020 from October 20, 2020 through April 10, 2021, hotel rooms are being competitively priced in an effort to stimulate demand and keep up with accelerating room supply. This has been a common trend among the majority of key markets in the Middle East since the drop in oil prices in 2014.
"The Expo 2020 is a headliner event for the region and is bound to give a fillip to the economy of UAE," said Nevil D'Souza, commercial director, R Hotels - Dubai properties. "It will also raise the profile of the country in the international arena as a commercial center. It is inevitable that there would be a commensurate increase in inventory to cater to the huge demand expected from the tourist and corporate leisure segment. Looking at the pace of the growth, both in terms of visitor traffic and inventory, I think there would be a healthy competition between hotels to get the largest market share. Hence, while the industry will benefit from increased occupancy, the visitor too will not be affected due to moderation in prices."
Helal Saeed Almarri, director general of Dubai Tourism, highlighted the importance of the tourism industry as one of the cornerstones of Dubai's diversified economic growth. "We measure success based on our ability to aggressively advance towards our goal to be the number one most visited and most preferred city as envisioned by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The consequent rise in value creation opportunities, and more inclusive sector participation are core priorities, as we equally strive to sustainably grow GDP contribution. Our first half results are a particularly encouraging reflection of our progress towards this ambition and underline the effectiveness of our diversified market outreach with holistic 'awareness to booking' cycle content amplification and audience delivery, through a deeply networked ecosystem of global partners, industry stakeholders and government enablers."
He added: "Our approach to create a unique positioning and raise Dubai's consideration among global travellers is to regularly showcase the dynamic evolution of our city proposition and the versatility of our portfolio that delivers truly customisable experiences for each and every visitor. Such a strategy would not be successful without multi-level partnerships between the public and private sector, and our cross-sector efforts are especially evident in the festivals and events spheres where our constructive and cooperative relationships with stakeholders have helped create truly memorable experiences for visitors. Stakeholder engagement is crucial to generating tourism growth and we are confident that it is this collective vision that will carry Dubai's tourism industry into the future and ensure that it remains a 'must visit' destination."
- rohma@khaleejtimes.com