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Dubai hotels occupancy hits 73% in 2022, highest in the world

The 73 per cent occupancy rate in 2022 is just short of the 75 per cent occupancy in the pre-pandemic period of 2019

Dubai’s hospitality industry staged a strong rebound in 2022 as average occupancy rates climbed to 73 per cent due to tourist influx after the revival of travel and opening of international borders, latest data shows.

Dubai’s Department of Economy and Tourism (DET), which indicated 97 per cent year-on-year increase in international visitors to 14.36 million last year, said 73 per cent hotel occupancy rate in the emirate is one of the highest in the world. The average occupancy rate was 67 per cent in 2021.

“The 73 per cent occupancy rate in Dubai is much ahead of its competitors as it attracted international visitors throughout the year with quality and premium services with the help of partners such as Emirates airline, flydubai and other hospitality units of the government,” according to an industry analyst.

Referring to latest data by STR, he said hotels in Europe and Asia recorded 64.6 per cent and 52.3 per cent occupancy rate, respectively, last year.

In addition, the Middle East and Africa hotels achieved 63.6 per cent and 54.2 per cent occupancy, respectively, while North America (62.5 per cent), South America (57 per cent), Australia and Oceania (63.9 per cent) recorded much below average occupancy rate compared to Dubai.

“The 73 per cent occupancy rate in 2022 is just short of the 75 per cent occupancy in the pre-pandemic period of 2019. The high occupancy is particularly noteworthy as it was achieved despite a 16 per cent increase in room supply in 2022 compared to 2019,” according to the DET statement.

Strong hospitality metrics

Dubai’s hotel sector, which continues to be integral to the emirate’s destination promise and the overall growth of the tourism industry, continued to perform strongly across all hospitality metrics.

“Dubai’s hotel inventory at the end of December 2022 comprised of 146,496 rooms at 804 hotel establishments, compared to 126,120 rooms available at the end of December 2019 across 741 establishments. The total number of hotels in 2022 marked a six per cent growth over 2021, with 755 hotel establishments offering 137,950 rooms, figures that highlight the continued strong investor confidence in Dubai’s tourism sector,” according to DET.

Iftikhar Hamdani, area general manager for Northern Emirates at Hospitality Management Holding (HMH), said the UAE hospitality industry has a bright prospects with primary focus will remain on the high occupancy in Dubai hotels.

“Northern Emirates hotels get huge benefits of Dubai airports as our major tourists’ influx is from Dubai airports. Coral Beach Resort Sharjah hit 86 per cent occupancy in year 2022, now we have budgeted an aggressive 90 per cent occupancy for year 2023,” Hamdani told Khaleej Times on Sunday.

“We have exceeded occupancy and profitability compared to pre-Covid period in our both hotels in Ajman and Sharjah. We foresee 19 per cent growth in revenues this year compared to 2022,” he said.

Pre-pandemic levels

The hotel sector outperformed pre-pandemic levels across all other key measurements – occupied room nights, average daily rate (ADR) and revenue per available room (RevPAR), according to DET.

“Occupied room nights reached a record high of 37.43 million room nights in 2022, registering a 19 per cent increase compared to 31.47 million in 2021. It is a 17 per cent increase over the pre-pandemic period of 2019, which yielded 32.11 million occupied room nights,” DET data shows.

The ADR of Dh536 in 2022 surpassed the ADRs for both 2021 (Dh451) and 2019 (Dh415), with 19 per cent and 29 per cent increases, respectively.

Moreover, the hotel sector’s robust performance is also evident in its RevPAR growth, which rose to Dh391 last year from Dh301 in 2021, indicating an increase of 30 per cent. The RevPar surged 25 per cent over the pre-pandemic period of 2019 when it recorded Dh312 on average.

“December daily data shows Dubai’s highest performance was recorded on New Year’s eve as it recorded 91 per cent occupancy while average daily rate and revenue per available room surged to Dh1,765.51 and Dh1,606.74, respectively. With the exception of four days during the month, daily occupancy levels remained above 70 per cent,” according to STR.

— muzaffarrizvi@khaleejtimes.com