A new study of Dubai’s hotel market is forecasting a 10.2 per cent compound annual growth rate (CAGR) over the next 24 months in occupied room nights, reaching 35.5 million annually in 2019.
According to the study, conducted by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism), the emirate’s room supply is set to reach 132,000 by the end of 2019, growing at a two-year (2017-2019) CAGR of 11.1 per cent.
Meanwhile, occupancy levels are expected to remain at around 76-78 per cent, despite a significant growth in capacity, provided Dubai increases its international overnight visitation numbers in parallel.
Dubai Tourism says it is working to increase visitor levels, in line with its target of bringing 20 million tourists to the emirate in 2020, through “concerted efforts to raise awareness in both established and emerging source markets.”
Also seeking to increase the length of each visitor’s stay, the authority forecasts that the duration of travel from new and existing segments is expected to see further growth in the medium term, “positively impacting demand for room nights, which is in turn expected to outpace visitor growth over the coming 24-48 months.”
Helal Saeed Al Merri, director general of Dubai Tourism, said in a statement: “With international and local investors, and operators continuing to actively pursue opportunities in Dubai, we expect to see not only sustained growth in inventory in line with our projected demand for occupied nights, but also further diversification across various asset classifications, to ensure that as a city we are the most globally competitive in providing our visitors the optimal range of options that cater to their preferences across the spectrum of hospitality offerings.”
At the end of 2017, Dubai’s hotel inventory stood at 107,431 rooms, with growth of 4 per cent over the course of the year, and occupancy at 78 per cent.
The emirate offset its capacity increase thanks to the 6.2 per cent growth in overnight visitors to 15.79 million.
The statement adds that this robust performance is “particularly significant” as it came amid challenging economic and political conditions across key source markets, including the volatility impact of “fluctuating oil prices and Brexit.”