Hotel demand in Dubai will outstrip supply by 2016 despite ongoing announcements of new properties, the head of luxury developer Damac Properties said on Monday.
The emirate is working to double its tourist numbers to 20m by 2020, with a string of new developments announced and the new Dubai World Central – Al Maktoum International Airport to begin commercial flights in October.
But occupancy rates already are significantly high and Damac managing director Ziad El Chaar said developers would not be able to keep up with demand.
“Even with more hotels coming online in the next few years, Dubai’s exponential growth as an attractive global tourist and business destination will see demand exceed supply by 2016,” El Chaar said.
“In just three years – 2016 - Dubai will see a year that will reinforce Dubai’s position as a global leader for luxurious hospitality, stunning real estate and unrivalled opportunities.”
Damac is building 8,000 luxury serviced hotel apartments, a sector El Chaar claims is underserved.
However, other hotel developers are turning their attention to lower-end accommodation, a market that has been barely tapped into in Dubai.
Emaar Properties and Meraas Holding recently announced their new economy hotel brand, while the head of the world’s largest hospitality group, Wyndham Group, Eric Danziger told Arabian Business he was concentrating on the lower and middle end of the market.
Hotel occupancy rates have soared this year.
The recent Ernst & Young Middle East Hotel Benchmark Survey said Dubai’s overall occupancy rate was 83.6 percent so far this year, while RevPAR had increased 10.4 percent year-to-date, as the average room rate increased 7.3 percent.
The latest Hotstats report on the region’s hotel industry also shows occupancy rates in the first quarter of 2013 reached 83.9 percent, up from 77.3 percent in the same period last year.
Total room RevPar increased to $237.13, from $201.35, while average room rates rose from $260.46 to $282.72.