Dubai set for 100,000 hotel rooms

Dubai - Dubai Tourism expects occupied room nights in hotels and hotel apartments to hit 36.9m

With Dubai's hotel industry set to hit the 100,000-room milestone next month, the city aims to firmly position itself as a top 10 global destination in terms of available hotel supply.
Over the next three years, Dubai's Department of Tourism and Commerce Marketing (Dubai Tourism) expects occupied room nights in hotels and hotel apartments to reach 36.9 million, representing an 11-12 per cent compound annual growth rate (CAGR) to 2018 end. As such, the overall room supply is expected to reflect similar growth, reaching 138,000 rooms by the end of 2018, Dubai Tourism said in a statement.
With demand increasing, overall projected occupancy rates until 2018 are expected to be around 77 per cent despite growth in capacity, ensuring Dubai remains a highly competitive visitation draw.
In the first quarter of 2016, Dubai's hotels saw some of the highest global rates in occupancy, RevPar and average daily rates at 85 per cent, Dh520 and Dh609, respectively.
Helal Saeed Almarri, director-general, Dubai Tourism, said structurally, healthy occupancy levels are a pre-requisite to absorb increased demand without price escalation, ensuring Dubai's destination offering remains appealing to global travellers in an intensely competitive market while retaining hotel sector performance.
"Our projected supply needs are based on maintaining a solid occupancy threshold despite a 40 per cent increase in capacity which is very strong for the hospitality industry and is designed to ensure that the overall economic value for Dubai continues to be enhanced," said Almarri.
To cater for future market needs fuelled by projected increases in visitor numbers and visitation duration, as well as a tangible shift in the behaviour mix of tourists to opt for paid accommodation, Dubai Tourism forecasts the need for continued industry pipeline growth at a CAGR of 12 per cent (2015-2018), in order for the destination to remain competitive, Dubai Tourism said.
In line with its tourism strategy, Dubai's destination proposition has been developing steadily, fuelled by investment from government, public and private sectors, in order to meet the target of attracting 20 million visitors per year by 2020.
A number of major theme parks are due to open this year, along with more cultural offerings including Dubai Opera House and Dubai Historical District, as well as highly diversified retail and shopping environments. All of these developments will ultimately drive longer visitor stays, Dubai Tourism said.
As part of the strategy, Dubai Tourism expects to expand overall length of stay (hotel nights) to four days by 2018, along with the volume growth in international overnight visitors - spurred by ever-increasing air connectivity and seat capacity primarily being delivered by the emirate's two home-grown carriers, Emirates airline and flydubai.
"Our 3-5 year targets for tourism traffic, specific segment mix growth and the sector's direct GDP contribution - that is driven by length of stay and spend beyond volume - are firm, and the entire industry has been working steadily to deliver against them," said Almarri.
He said growth in hotel and hotel apartment inventory from year-end 2015 till the end of 2018 sees an expansion of properties across the classification mix, with three and four-star properties expecting 16.8 per cent and 14.4 per cent CAGR growth respectively.
"Dubai is, and will continue, to be a leading luxury destination, and we continue to invest marketing spend in bringing more tourists that are seeking the high-end experience, which had facilitated the sector to invest in adding more five-star inventory despite challenging global markets," said Almarri.
"We will continue to work closely with the hotel sector on inventory development over the coming years to maintain our competitiveness and our ability to be able to better penetrate the global tourism market," he said.
A number of key top-draw attractions will open in 2016, helping to further propel Dubai's international attractiveness among longer-stay visitors, with the launch of two mega theme park projects being a primary driver.
These include Dubai Parks & Resorts - which houses Legoland Dubai, Legoland Water Park, Motiongate Dubai and Bollywood Parks Dubai. It is projected to attract 6.7 million visits in its first full year of operation in 2017. The company also announced the addition of the Middle East's first Six Flags theme park, which will open in the fourth quarter of 2019.
Meanwhile, IMG Worlds of Adventure, opening in August of this year, has a capacity to welcome 20,000 visitors per day and is forecasted to attract 4.5 million visitors.
In addition, Dubai Safari, as well as the iconic Dubai Opera House and the theatrical residency of La Perle by Dragone at Al Habtoor City, will greatly enhance Dubai's global appeal among families and experience seekers when they open later in 2016.
On the retail front, Dubai's already strong offering made up of over 95 malls as well as traditional Arabian souks is scheduled to see close to 400,000 square metres of additional retail space completed in 2016.
Dubai Historical District - a 1.5sqkm cultural rejuvenation project being developed to enhance Khor Dubai, as well as the other historic neighbourhoods of Bur Dubai, Al Fahidi and Deira, to showcase the emirate's heritage, particularly in the fields of trade, handicrafts and pearl diving - is also expected to be a key visitation driver in the coming years.
- issacjohn@khaleejtimes.com