Dubai’s tourism sector is showing signs of a strong recovery. On September 13, the Department of Tourism and Commerce Marketing (DTCM) issued a report on the sector’s performance for the first six months of the year, with the results making for pleasant reading for those in Dubai’s tourist trade.
Tourist arrivals were up by 9 percent in the first half of the year, with more than 4.18 million visitors, while hotel revenue rose by 6 percent to $1.87 billion. Occupancy rates were also solid, at 71 percent, this despite the fact that there had been a 7 percent increase in the number of hotel rooms on offer.
Importantly, not only did Dubai’s hotels welcome more tourists, but visitors also stayed for significantly longer than they did in 2009, with an 18 percent rise in the number of nights rooms were occupied. Guests bedded down for 12.46 million nights in total, up from 10.5 million in the first half of last year.
These figures suggest that Dubai is well on its way to eclipsing last year’s 6.1 million hotel guests, a figure which in turn represented a 1.3 percent fall on the 2008 total. Tourism accounts for around 19 percent of the emirate’s GDP at present, and this will likely increase in line with visitor numbers going forward.
According to Khalid Ahmed bin Sulayem, the DTCM’s director-general, the first-half results represented a significant achievement, one he said that was due in large part to the close co-operation between the public and private sectors.
“Despite the challenging conditions faced by the global tourism industry last year, Dubai was still able to achieve impressive results in terms of tourist arrivals, hotel revenues and tourism-related events,” said Bin Sulayem.
However, while Dubai has done well to rebound from the downturn in the global tourism trade, it has come at a cost, with many hotels lowering tariffs to attract customers. A report issued by online booking operator Hotels.com on September 14 said that Dubai’s hotels had reduced their room rates by an average of 10 percent in the second quarter compared to the same period in 2009.
While local hoteliers may have had to reduce their rates to maintain occupancy levels, the cuts were less than those in some neighbouring emirates, and elsewhere in the region. There may well be an upside to the rate cuts, however, with the enforced discounts prompting the emirate’s tourism sector to rebrand itself to a degree, according to Ghassan Aridi, the CEO of inbound operator Alpha Tours, who says Dubai is now an affordable luxury destination.
“People are travelling for entertainment and comfort – a nice hotel, good food, a spa, shopping,” he said in an interview with Gulf News on September 15. “This is what people are looking for and Dubai has this. It’s an asset that will help the industry pick up again.”
As the industry is gathering renewed momentum, so too are investments, with a growing number of new hotels either on the drawing board or under construction. According to a recent report by tourism research firm STR Global, Dubai is looking to add more than 32,500 new hotel rooms to its stock, with over half of these already at the building stage. This new supply represents more than 25 percent of all hotel rooms in the construction pipeline across the Middle East and North African region, the report said.
While indicative of the faith investors have in the sector, this increase in room numbers could pose a challenge as well, says Naeem Darkazally, the director of sales and marketing for hotel chain Rotana in Dubai and the Northern Emirates.
“In five years or less, we will be seeing…a big supply coming in if all the projects go through,” he told local media in mid-September.
Dubai will need to ensure that it can continue to maintain – or better still improve – occupancy rates while increasing the number of hotels in the marketplace. Given the performance of the tourism sector during the global recession and its strong bounce-back in the wake of the downturn, the emirate looks well placed to cash in on the investments it has made to support the tourist trade in the years ahead.
