By Sarah Townsend
Emirate is still aiming to attract 20m visitors a year by 2020, but faces challenges, says the head of Dubai’s tourism department
The head of Dubai’s tourism department has forecast “high single digit” growth in tourism over the next 12 months, while acknowledging the emirate faces a degree of pressure in meeting its target of 20 million visitors a year by 2020.
Helal Saeed Almarri, director-general of the Department of Tourism and Commerce Marketing (DTCM), revealed his predictions for the year ahead on the back of this year’s Dubai Annual Visitor Report, due to be published later this week.
Arabian Business reported on the headline findings of the report on Sunday, which revealed a total of 13.2 million tourists visited Dubai in 2014. This represents year-on-year growth of 8.2 percent, almost double the global average of 4.7 percent.
Almarri told a roundtable on Monday that his expectations for 2015 were “strong” and the number of visitors to Dubai will grow by between 7-9 percent, while he believed direct spend from tourism will continue to represent around 20 percent of the emirate’s GDP.
Almarri said he “would not expect revenue growth to outstrip visitor numbers unless tourists stay for substantially longer periods of time”.
The average length of stay for hotel guests in 2014 was 3.8 days, according to the report, but for all international overnight visitors, including those staying with friends or in private rented accommodation, the figure was 7.8 days.
Dubai has no plans to hike up the AED10-20 hospitality fee that was introduced a year ago to maximise revenue - partly because the average length of stay is increasing, said Almarri. “The charge is linked to room fees and goes up depending on number of nights booked. We purposely introduced it at a low level and will continue to monitor whether it has an impact on visitor numbers.”
He also played down concerns that the supply of hotel rooms is beginning to outstrip demand. Last month, data from STR Global showed that strong supply growth of 6.9 percent had outstripped demand of 4.5 percent during March.
The analyst also reported a 2.2 percent decline in occupancy rates to 85.7 percent and a 6.1 percent drop in average daily rates (ADR) to AED978.69 ($266), while revenue per available room (RevPAR) also slumped, by 8.1 percent to AED838.69.
The figures prompted speculation that a drop in the number of tourists from Russia, as well as tougher competition from Egypt and Lebanon, are affecting demand for hotels in Dubai.
Almarri said: “If you look at our figures, overall revenue growth for hotels was 9.8 percent and we can see demand has outstripped supply for the past four years, so these concerns are not borne out.
“The idea that RevPAR has an influence on overall growth [is flawed]. RevPAR needed to level out, which is what it has started to do.”
Unexpected currency swings such as the recent depreciation of the dollar has only had a short-term impact, Almarri said, while the impact of the collapse of the roubel – “though a more serious situation, coupled as it was with widespread economic turbulence in Russia” – has been mitigated by increases in the number of tourists from Dubai’s established source markets the UK and Germany, and from Eastern Europe since the emirate relaxed visa restrictions there last March.
However, Almarri admitted Dubai faces challenges in realising its Tourism Vision for 2020, which includes attracting 20 million visitors a year. “We are on track but I wouldn’t say there’s no pressure. Every year we face new challenges and it is about targeted marketing and continuing to raise awareness of Dubai as a global tourism destination. We want more word of mouth recommendations.
“But look, until last year there was no Boxpark, no The Walk at JBR, plenty of other things weren’t here – Dubai is not stopping. I am confident demand will grow and we will meet our goals.”