Dubai’s Hospitality Sector Tops Among Other Key Global Cities

The continuous efforts of Dubai have brought something fruitful to the city’s hospitality sector as one of the world’s top performers and having the record of highest occupancy in the Middle East North Africa (MENA) region in the first quarter (Q1) of 2018. Numerous tourist attractions, theme parks, events, and festivals created more visitors causing large demand for hotels and holiday homes in Dubai.

Occupancy at Dubai hotels reached 86.9 percent with an average room rate of $293 (1076 Dhs) which led to an overall revenue per available room of $255 (937 Dhs) in Q1 of 2018. EY Middle East Hotel Benchmark Survey Report stated that the increase of occupancy in Dubai is possibly due to international visitors coming for the 23rd edition of the Dubai Shopping Festival (DSS) and the nice warm weather.

"Even though there was a slight decline in the average daily rate (ADR) by 1.2 percent to $293 in the first quarter, Dubai achieved the highest RevPAR in the region at $255 in the first quarter of 2018, the same as last year," EY report said.

In the Q1 of this year, we witnessed a steady growth in hotel occupancy across the Middle East hospitality market compared to the first quarter of 2017. "This increase was primarily due to a number of shopping festivals, improving bilateral relations, and overall pleasant climate conditions across the region," according to EY.

Looking forward to the Expo 2020, the Dubai tourism sector is gearing up to host more than 20 Million visitors from across the world. Also, Dubai is on top of seven other key global cities in average spend per overnight visitor estimated to be over $2,000 in 2017- the highest among other prime global cities and the number of hotel keys per resident at 29.9 keys per 1,000 people, as stated in the latest Dubai market research.

Other cities include New York, London, Paris, Singapore, Hong Kong, Shanghai, and Sydney.

Despite facing challenging market conditions, Dubai's hospitality sector remains among 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.

The development of numerous tourism projects such as IMG World of adventure, Dubai Parks, and Resorts as well as cultural attractions like The Louvre in Abu Dhabi are expected to draw more tourists even after 10 years from the Expo 2020.

Beachfront hotels in Dubai saw a great demand in occupancy in Q1 of this year. Beachfront hotels in Dubai reached 82.7 percent with an average room rate of $559 (2053 Dhs), which led to a revenue of $462 (1697 Dhs). Furthermore, city hotels in Dubai are also performing well with a slight increase in occupancy with 88.7 percent. However, the revenue per available room fell by 6.2 percent to $168 (617 Dhs) in Q1 2018 due to a 6.8 percent decrease in the average room rate.