UAE hospitality remains on strong growth path

The UAE hotel industry remains on a strong growth path, with an estimated 251,000 keys by 2030, a report by benchmarking company STR showed.

The tourism industry is one of the biggest non-oil revenue sources in the country, and its hotel provision reflects this, a report from Top Hotel Projects (THP) says. In the high end of the hotel sector, UAE is set to welcome at least 130 premium sites totalling nearly 34,000 rooms over the coming years, according to THP data.

The country’s reputation for luxury remains undimmed as far as forthcoming hotels go, with 64 per cent of the high-end pipeline in the five star category, equating to 83 sites, while the remaining 36 per cent, 47 projects are upscale four star builds, THP data showed.

A recent report by JLL Mena supported these trends. In a recent report, JLL quoted Dubai Economy and Tourism (DET) data that showed that the emirate received 12.82 million overnight visitors between January and November 2022.

The occupancy rate for Dubai’s hotels climbed to 72 per cent over January-November 2022, a strong improvement compared to last year (63 per cent). Simultaneously, the city’s average daily rate (ADR) rose by 22 per cent year-on-year to $184. Meanwhile, Abu Dhabi’s occupancy rate climbed to 69 per cent in the first 11 months of last year (up from 66 per cent in the corresponding part of 2021) and ADR jumped by 29 per cent to USD 119.

Khaleej Times spoke to two prominent players in the hospitality sector to understand the trends.

Sofitel Dubai Downtown represents French elegance in the heart of the iconic Downtown Dubai. The hotel offers an exceptional setting for business, leisure and exploration within the New and Old Dubai.

Gates Hospitality specialises in asset management and food and beverage concepts. Since inception in 2010, the company has grown from a single unit venture to six venues in UAE and international presence in London UK and beyond.

Excerpts from the interviews:

With most travel restrictions being removed post-Covid, how has ‘revenge tourism’ been in the Middle East in general and the UAE in particular?

Caroline Trichet, General Manager, Sofitel Dubai Downtown: Travel and tourism are critical pillars of the UAE economy and the region. Throughout the pandemic, the UAE has been one of the most resilient in the face of changing Covid variants, with the world’s highest vaccination rate and extensive, affordable testing. The region had the most robust resurgence in international travel last year, with arrivals climbing to 83 per cent of pre-pandemic numbers. Significant events, including Expo 2020 Dubai and the Fifa World Cup in Qatar, helped drive visitors back to the Middle East. More than 900 million travelled internationally last year, double the number of travellers in 2021.

Economic factors may influence how people travel in 2023, and demand for domestic and regional travel will remain strong and help drive the sector’s wider recovery,” Challenges that might slow tourism recovery this year include high inflation, interest rates, a spike in oil and food prices and fears of a global recession, as well as uncertainty from Russia’s war on Ukraine and health worries related to Covid-19.

Naim Maadad, CEO & Founder, Gates Hospitality: It has been very strong, more than simply a revenge. We were lucky to have been the first countries to have lifted restrictions and eventually opened, sending public messages of safety and tourism lifestyle. This is a double win for Dubai in particular as it has put Dubai as a very favourable destination for the global market to travel to given the activities and events we have seen in the city during various seasons, in which we have witnessed a lot of new emerging markets have visited the region. This is important for us as in the hospitality industry as we are growing attention in the city, and only means that people will be coming back.

How has the MICE sector fared as physical meetings come into play once again?

Naim Maadad: The MICE market is making huge comeback as large organisations are reactivating their events. People have been locked up for years and today, they feel like they need to be face to face, conducting business like the old days as we know it. I believe MICE will be a massive part of 2023 and the region will do extremely well out of that because of travel and the way the city positions itself.