Hotel occupancy in Dubai and Abu Dhabi above 70% in first five months as tourism rebounds

Hotels in Dubai and Abu Dhabi reported strong occupancy rates for the first five months of this year as the tourism sector in the UAE continues to rebound from the coronavirus-related slowdown.

The occupancy rate at Dubai hotels reached 75 per cent in the first five months of this year, up from 58 per cent in the same period of last year, a report by consultancy JLL said.

The average daily rate (ADR) during the period also jumped to $213, which had a “notable impact” on revenue per available room (RevPar), a key measure of hotel performance, which nearly doubled to $160.

In the capital, the occupancy rate rose to 71 per cent during the January-May period, up by 10 percentage points annually, JLL said.

ADR climbed by 27 per cent year-on-year to $112, with RevPar posting a double-digit increase to $79 in the first five months of 2022.

“So far this year, the UAE’s hotel sector has benefited from higher visitor numbers from a range of source markets. Luxury resorts and waterfront destinations remain the preferred choice for guests and as such have outperformed other segments,” the report said.

Dubai welcomed about 6.17 million international visitors from January to May, three times more than in the same period last year, the emirate's Department of Economy and Tourism (DET) said last month.

The surge in visitor numbers followed government initiatives that helped the tourism sector bounce back quickly from the pandemic and the momentum generated by Expo 2020 Dubai, the DET said.

Looking ahead, hotels in Dubai expect to be close to full capacity in the final months of the year as tens of thousands of football fans plan to use it as a base for the 2022 Qatar World Cup.

Supporters' groups are booking up hotels in the emirate, which is gearing up to meet the additional demand.

Dubai saw the completion of about 500 keys in the hospitality sector in the second quarter of 2022, which led to the city’s total hotel stock reaching 144,000, JLL said.

An additional 10,000 keys are scheduled to be handed over in the second half of this year.

In Abu Dhabi, while no new stock was added in the second quarter, about 700 keys are expected to be delivered by the end of 2022.

“While we did see an uptick in positive sentiment towards the sector, hotel operators will need to be competitive in their offerings evolving from traditional models to get an edge, as the market matures further,” said Amr El Nady, head of hotels and hospitality, Middle East and Africa, and executive vice president of the global hotel desk at JLL.

Traditional operators are likely to evolve to offer a variety of food and beverage options to attract more visitors, the report said.

“This becomes pertinent, especially in light of managing the overall impact of inflation and the growing strength of the UAE dirham on the purchasing power of tourists. The key will lie in adopting a balanced approach to achieving revenue targets,” Mr El Nady said.