Dubai Hospitality Sector Overview – 2018

Dubai’s Hospitality Sector Overview – 2018

Dubai Hospitality Sector Overview – 2018

Thanks to the ever-expanding tourism infrastructure in Dubai, the hospitality sector has become one of the fastest-growing sectors in the Emirate contributing near around 6-8 per cent towards Dubai’s GDP. In addition, Dubai remains one of the leading performing hotel markets in the UAE in terms of hotel revenue per available room (REVPAR) as the hotel occupancy rates hover around 75 per cent.

Presently, Dubai has one of the highest numbers of hotel rooms (100,000) and is set to see a massive increase of 28,000 new hotel rooms as 80 new hotels are set to open in Dubai, increasing the hotel supply by 30 per cent by 2018. Nonetheless, the total room supply in the region is forecasted to grow at a CAGR of 4 per cent, slower than 5.7 per cent increase in international tourist arrivals.

Dubai – Leading Tourist Destination Globally

According to Mastercard’s 2017 Global Destination Cities Index, Dubai is in fourth most visited destination by tourists globally with 7.7 per cent growth and 16 million visitors expected for 2018. Additionally, Dubai is at the top of the ranking in terms of visitor spending. In 2016, its 14.9 million international overnight visitors spent $28.5 billion, with more than 10 per cent growth forecast for 2017-18.

Dubai Tourism Trends by Nationality

India and China remained major growth markets in 2017, and the expectation is that this trend will persist throughout 2018. Additionally, tourist arrivals are set to rise, with Saudi Arabia (KSA) and United Kingdom (UK) maintaining their position in terms of the most important tourism source market for the Dubai. Also, the increasing numbers of travelers from newer source markets like from Far East are expected to drive Dubai’s hospitality sector performance further.

Mid-scale Hotel Segment to Thrive in Dubai

The mid-scale segment will continue to be an important growth driver, given the growing middle class tourists that will likely visit the Emirate. The outlook for Dubai looks positive, especially as the Emirate continues to invest in tourism infrastructure and diversify towards new source markets globally.

Major Hospitality Attractions to Boost Tourist Arrivals in Dubai

In 2018, Dubai hospitality sector will see stability in performance, as industry experts believe that the opening of new attractions in the Emirate will bring in more tourists from traditional and emerging markets. Furthermore, the leisure demand is expected to increase with the introduction of new anchors such as La Mer, Dubai Safari Park, Dubai Frame, the world’s longest zipline in Jabel Jais Ras Al Khaimah and Warner Bros World Abu Dhabi.

It is likely that Dubai will witness the development of quality internationally branded mid-scale hotels in 2018 even though it was positioned as a luxury travel market for many years. With the opening of theme parks, cultural attractions and EXPO 2020 Dubai on the horizon, greater attention is being placed on economy and mid-market segments. This trend will continue to grow into 2018 making Dubai one of the leading investment destinations for the hotel and hospitality sector globally.

Emerging Trends in Dubai’s Hospitality Sector

Dubai hospitality sector is likely to welcome a new generation of travelers in 2018 and years ahead. These travelers will not be necessarily motivated by traditional hotel ratings, but rather by sustainable, personalized and culturally conscious experiences.

Investment Opportunities in Dubai’s Hospitality Sector

Driven by ambitious plans, wide scale initiatives and continuously increasing inflow volume, Dubai’s hospitality sector will remain one of the key avenues for investment amongst international and regional investors. Large volume of investment is expected into hotels, hotel apartments, resorts & spas, wellness centers, restaurants and travel management ventures. Similar bullishness should prevail in retail ventures, wherein the dynamics are closely linked with tourism business.

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