Dubai: It looks like Dubai is again drawing holidaymakers in droves as mega attractions and developments come on stream, with demand for hotel rooms reaching a five-year high by the end of 2016, latest data showed.
After going through a sluggish period, hoteliers got very busy during the last few days of 2016, when rooms were more than 90 per cent occupied for three consecutive nights. On New Year’s Eve alone, occupancy levels reached more than 95 per cent.
The last quarter of the year is one of the busiest periods for the emirate’s hospitality industry. Last November, Dubai International welcomed more than 6.5 million passengers, up from 6 million from a year earlier.
Research firm STR on Wednesday said its preliminary December 2016 figures for Dubai’s hotel industry “indicates strong demand growth” although huge supply is still weighing on room rates and revenues.
Hotel occupancy went up by 3.2 per cent to 79.7 per cent in December, while demand jumped 9.1 per cent, the highest since five years ago.
“This was Dubai’s highest December demand increase since 2011. The month closed with three consecutive nights of occupancy above 90 per cent, including a level of more than 95 per cent on New Year’s Eve,” STR said in a statement sent to Gulf News.
However, the average daily rate dropped 8.4 per cent to Dh824.58 in the same period. The revenue per available room (RevPAR), a benchmark for hotel profitability, fell 5.4 per cent to Dh657.37, while supply rose by 5.7 per cent.
“Supply continues to grow in Dubai as the market prepares to host Expo 2020,” STR said. Analysts at the firm also noted that while Dubai’s ADR dropped year over year, the metric is beginning to trend towards its usual first-quarter levels, which are traditionally the highest of the year.
Sources in the hotel industry had earlier anticipated an increase in demand as Dubai unveiled a number of mega projects, including theme parks and resorts in one year, such as Dubai Parks and Resorts, Dubai Water Canal and IMG Worlds of Adventure.
“November and December are primarily busy months with a lot of business to capture in the market, in conjunction with the launch of IMG, theme parks and the airlines dropping their prices [which are all] playing a big role for this increase,” a spokesperson for Millennium Plaza Hotel told Gulf News.
Premjit Bangara at Sharaf Travel said they saw a surge in bookings made by travellers from India, Philippines and the United Kingdom in December.
"This was mainly due to the holiday and winter season. Janjuary has again begun reasonably well with Indian nationals dominating the list at the moment. This can be attributed to the easing of the demonitisation blues experienced earlier in India and that market seems to be reviving," Bangara told Gulf News.
."We also have seen a small increase in the number of tourists coming in from China, UK and continental Europe."
Aside from the improving currency situation in India, the rise in the number of visitors to Dubai can also be due to competitive hotel rates.
"Hotels vie with each other in offering value pricing to tourists leading to increasing numbers in 2017. The Dubai Shopping Festival and the opening of a couple of major amusement parks have also contributed to this increase," Bangara added.
