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Analysis

Dubai diversifies its supply to attract more tourists

The DTCM (Dubai Tourism and Commerce Marketing) published its occupancy figures for 2014. The Emirate attracted 11.6 million visitors, meaning a 5.6% increase over the previous year. To meet increasing demand, hotel groups developed forty or so additional hotels on the same period (9.2% additional rooms). According to MKG Hospitality, the RevPAR progressed by 1.3% last year.

All lights are green for Dubai's arrivals statistics. According to the DTCM (Dubai Tourism and Commerce Marketing), the city welcomed 11.6 million visitors at its properties in 2014, a 5.6% increase over the previous year. 44.6 million nights were recorded throughout the year, for 7.4% more than in 2013. Travelers were not only more numerous, but they also stayed longer. The average length of stay increased from 3.78 to 3.84 days on a comparable period.

This increase could be observed from all continents. In 2014, the first source continents for tourists remained the neighboring Emirates with 4.3 million tourists, Europe with 2.9 million visitors, and Southern Asia (1.8 million tourists).

In terms of country, Saudi Arabia is once again in the lead, followed by India (+12.2%) and the United Kingdom (+11.3 %). Next follow the United States, Iran, the Sultanate of Oman, China -which climbed three rungs (+24.9% growth), Kuwait, Russia and Germany. The law applied in March 2014 by the United Arab Emirates exempting 13 more European countries from visa requirements certainly contributed to the growth in number of tourists from this continent (+2.8% to 2.9 million visitors).

The Emirate posts a RevPAR on the rise

Arrivals in the Emirate allowed hotels to post an occupancy rate close to 80% accross the year, according to data published by MKG Hospitality. This figure was reached whereas 8,000 new rooms were added to the supply during the year* (meaning forty or so, often upscale, hotels). With average daily rates up by 3.9%, the Revenue per available room (RevPAR) increased by 1.3%.

Dubai prepares for the World Expo in Dubai in 2020.

Dubai wants to attract as many tourists as possible in 2020, the year it will organize the World Expo. In order to diversify its clientele, the destination wants to develop more affordable infrastructure. In 2014, 40% of hotels in the Emirate were four to five stars versus just 10% on the two and three star segments. The authorities thus implemented tax incentives so these structures could develop more rapidly. This means two- and three-star hotels will no longer have to pay the entire Municipality Fee, a 10% tax on the price of rooms sold.

"While the Emirate government encourages hotel chains to development the midscale prior to the Dubai World Expo 2020, we believe the timing is perfect to expand the reach of our brands Aloft and Element," declared Michael Wale, President of Starwood Hotels & Resorts Europe, Africa and Middle East, which plans to open two properties with 165 and 96 rooms by 2018. Carlson Rezidor Hotel Group recently opened the Park Inn by Radisson (90 apartments) in the Al Barsha neighborhood. The French group Accor, meanwhile, will develop an ibis Styles starting in 2016.

Dubai's authorities hope to reach 25 million visitors in 2020. To do so the city will have to grow quickly... but Dubai is used to that.

*Dubai had 84,534 rooms at 611 at the beginning of last year. At the end of 2014, these figures had grown to 92,333 rooms and 657 properties.

Also read:



  • Starwood Hotels & Resorts strengthens Dubai portfolio
  • Dubai: the hotel market continues to grow




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