The average daily hotel rate has risen 36 percent in January (AED814) from December (AED600), according to hotel data specialist STR.
Demand increased more than 5 percent year on year, and outperformed slowing supply growth, which increased 3.6 percent year on year. It was largely aided by a rebounding Russian market, particularly on beachfront properties.
Occupancy is very positive despite rising just over 1.5 percent to 86.4 percent.
Furthermore, Dubai saw its first January increase in revenue per available room since 2014, as it rose slightly (one percent) to AED704.
STR analysts predicted that year-over-year change in supply would be the lowest since November 2012, despite developers adding 50,000 rooms to accommodate 25 million visitors expected to visit Dubai for Expo2020.
Emaar Hospitality CEO Olivier Harnisch told Arabian Business in January that hotels will have to learn to operate at 65-70 percent occupancy and still be profitable, as the arrival of the Expo will result in market volatility.
“Demand and supply will grow strongly, but they will not be perfectly correlated. We’ve seen it last year in Dubai, where micro markets developed differently. The beach hotels were doing really well, and there was revenue increase year-on-year, whereas Downtown was a bit more subdued,” he said.
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