This week, like most weeks, I have been meeting with the general managers and decision makers from across Dubai’s hotel industry. These are the people who have helped to make Dubai one of the world’s most visited cities and who ensured that thousands of TripAdvisor users recently voted Dubai as the world’s leading destination for hotels, as well as for retail.
Inspired by the leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, we at Dubai Tourism are working with the our local, regional and global hotel partners to fulfil Dubai’s Tourism Vision of attracting 20 million annual visitors by 2020 and tripling the economic contribution made by tourism.
We are rightly proud of our hotel sector. We have some of the world’s finest hotels and outstanding levels of service - from business to boutique, desert retreats to urban resorts, deluxe to budget. Hotels already make a significant and growing contribution to Dubai’s economy: travel and tourism accounts for around 20 per cent of GDP. For our part, we in Dubai Government work to ensure that the hotel business - from owners and investors to concierges and car valets – are also rewarded for choosing to do business in Dubai.
Having just compiled our figures for the first half of 2014, we know that we have seen steady growth in the numbers of visitors staying in our hotels including increases from many of our key source markets. This increase comes despite the reduction in flights due to the refurbishment and upgrading of runways at Dubai International, for which Dubai Airports and our airline partners should be praised for ensuring minimal disruption. This commitment to partnership that exists across the emirate’s tourism industry between government and private sector has been a key contributor in ensuring Dubai’s hotel and hotel apartment occupancy rates are among the highest anywhere in the world – recording in excess of 84 per cent occupancy in both types of establishment.
Average length of visitor stay is also on the rise, now just short of four days on average. Total room revenues too are up, with growth of 15.3 percent on the same period in 2013 to reach AED12.74 billion ($3.46 billion) in the first six months of the year – providing real and tangible returns for our private sector hotel partners.
We are very pleased with our current occupancy and room rates and it is crucial that we continue to work together to ensure that while hotel revenues increase, room rates remain affordable. Contrary to some previously issued third-party figures which focus on five-star properties, Dubai’s average room rate for the first half of 2014 was AED637 and a recent Bloomberg report showed that our average room rate for the 5-star sector is lower than many of the global city destinations with which we compete – including London, Los Angeles, New York, Paris, Singapore, Hong Kong and Milan.
Across all classification gradings, this affordability is complemented by outstanding service, and exceptional quality and amenities which I and many in the industry believe cannot be bettered.
Our hoteliers understand, acknowledge and appreciate the commitment to the sector which is evident from the very highest levels of government and which permeates our business environment, our business legislation and our policy making. Together we are committed to sustainable growth, driving repeat visitors and shaping the global reputation of Dubai as a world leader in tourism and hospitality. As we work to meet our ambitious visitor and tourism targets, we need to ensure that room inventory grows to keep up with the current and future demand.
After a period of over-demand and under-supply, this is now close to alignment and we need to preserve this, continuing the steady flow of more hotels coming on to the market. By 2020 we are targeting an inventory of approximately 160,000 rooms. It’s important to keep stressing that Expo is a landmark moment on Dubai’s continual timeline and not the end of our journey, so we already look beyond 2020 and think of what Dubai will be like in 2030, 2040 and beyond.
Between the end of June 2013 and the end of June this year, the emirate’s room inventory increased by 8.8 percent, with 31 new hotels and hotel apartments adding 7,188 more rooms – taking us to 88,680 rooms in total. Maintaining this Compound Annual Growth Rate over the next six and a half years will ensure we hit our target. Our pipeline shows that we will add between 15,000 to 25,000 more rooms by the end of 2016 and more are being announced every month, including recent announcements by Marriott, Citymax and Accor.
Meeting the needs of business and leisure visitors, we know that we need to continue to develop the three and four star segment. As well as working to introduce legislation which incentivises the development of new hotels within these categories, we have been working with the industry to introduce a new hotel classification system. Now being rolled out, this will ensure that travellers have a clearer and more cohesive understanding of the offering of each hotel - from one to five star hotels, or standard to deluxe holiday homes, as well as clear designators indicating types of hotel, like beachfront or business, for example.
As we prepare for the winter season and the exceptional events calendar that we have for the rest of the year, I would like to extend my gratitude to our hotel partners for their cooperation and continued support.
Together, we are helping to shape a city that is well along the road to becoming the world’s most visited: a global events and entertainment capital which showcases the very best the travel and tourism industry, including the hotel sector, has to offer.For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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