Saudis, Indians among top visitors to Dubai in 2013: Study

Saudi Arabia drove the largest number of visits to Dubai in 2013 (1.4 million visits), followed by India (0.9 million visits) and the UK (0.75 million visits), according to a new study of the region’s tourism, hospitality and leisure (THL) industry.

Looking to the future, key growth markets for Dubai are likely to comprise Saudi Arabia, the Russian Federation, India and Iran, the report said.
Titled “Middle East Hotel Market Insight,” the quarterly reports launched by Deloitte and STR Global aim to highlight key trends and analysis on the Middle East’s THL industry.

The first report, focusing on Dubai, finds that the demand for hotel accommodation in Dubai has grown significantly in the last seven years. Across the upmarket sectors, demand measured in rooms sold has risen by almost 79 per cent between 2006 and 2013, it said.

“The growth in Dubai’s hotel supply in 2013 was more than matched by the growth in demand as evidenced by the rise in occupancy in 2013,” said Grant Salter, director, THL industry at Deloitte Middle East.

“This rise in room supply and the ongoing growth in demand, when seen in the context of the wider global economic challenges, points to a very robust hotel market. Dubai has established itself as one of the leading global tourism hotspots. With significant ongoing investment in tourism infrastructure, we expect Dubai to continue to climb the global tourism rankings,” he added.

The report reckons that, in 2006, Dubai had a total of 233 hotels providing almost 39,000 rooms across all sectors of the market, including 152 unaffiliated or independent hotels. It notes that, by the first quarter 2014, this total stock of hotels had grown by almost 48 per cent with the addition of 111 new hotels.

If the unaffiliated hotels are excluded, Dubai’s branded hotel market more than doubled, from 81 hotels in 2006 to 167 in Q1 of 2014, the study says. However, despite that 105 per cent growth in hotels and rooms, demand remains robust and is expected to continue growing, the study says.

“Despite the large supply growth in Dubai over the past few years, the market has been able to absorb the supply, and performance continues to tick upward,” said Phillip Wooller, Area Director, STR Global.

“Demand continues to stay strong, and in 2013 the luxury segment’s demand was back to its previous peak levels. Average Daily Rates (ADRs) for luxury hotels in Dubai rose 3.5 per cent in 2013. We expect Dubai’s occupancy to report slight declines in 2014 and 2015 while ADR and revenue per available room (RevPAR) to continue to grow at a slower pace than the previous years,” he said.

The Middle East/Africa region as a whole is still reporting performance increases, said Wooller. “During the first quarter of the year, occupancy in the region rose 1.2 per cent to 65.5 per cent; ADR was up 2.9 per cent to $179.74; and RevPAR increased 4.2 per cent to $117.72. Manama led both the occupancy (+19.1 per cent to 58.9 per cent) and RevPAR (+16.4 per cent to $116.05) increases for the quarter, while Dubai outperformed the region’s key markets in ADR (+7.5 per cent to $284.88)”.

The continued growth in demand, fuelled by ongoing improvements in tourism infrastructure and strong hotel operating performance, has stimulated continued investor interest in hotel development in Dubai.

“This is evidenced by STR Global data that there are currently 71 hotels confirmed across all market sectors in varying stages of planning or construction in Dubai which are estimated to provide over 22,000 additional rooms,” concluded Salter.

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