Staycation guests help Dubai hotels close August on a high

Dubai: Hotels in Dubai and the UAE have scored a hit by pushing hard on staycation promotions, first during the Eid holidays and over the last two weeks of August. Occupancy levels at many of these properties crossed the 60 per cent mark during this period, after suffering through 20 per cent or so during the April-June phase.

Clearly, selling holiday packages to residents have come to the rescue of the beleaguered hotel industry. It helped that hotel rates had dropped to record lows during this period.

“Hotel rates are under pressure - but it was a fantastic opportunity for the UAE residents to make the most of this once-in-a-lifetime opportunity,” said Philip Wooller, Area Director Middle East & Africa at data firm STR, which tracks the hotel industry. The consultancy expects average room rates to hover around the Dh350 a night mark for most of September as well before making some gains from October.

The Jumeirah Group confirmed that staycation-focussed offers have brought on the desired results. According to its Chief Commercial Officer. Alexander Lee, “The domestic market has proven extremely important - we continue to see increased demand from residents, particularly over the weekends.”

The July 7 lift

But with the resumption of tourist arrivals to Dubai from July 7, hotels no longer have to rely solely on local bookings. Hotels have also been reporting improved numbers since.

Anantara's Palm resort, which received its first overseas guest on July 8 and a German family on July 19, expects to take in more tourist arrivals in September. It also witnessed a rise in bookings during the extended Eid holidays last month.

Eid proved to be a big money-spinner for just about every hotel. According to STR, those in the more “desirable” locations had occupancy rates of up to 90 percent during the break.

A steep fall-off

After the pandemic broke, average rates across the country dropped nearly 20 per cent in June, according to TRI Hospitality Consulting. Philippe Vercruysse, manager, expects only see a “gradual recovery” in demand from regional visitors as restrictions in other Gulf countries ease.

“The number of overseas leisure travelers is likely to remain subdued until the global climate improves,” said Vercruysse. “With regards to corporate and special interest tourism, these can be expected to gradually recover in the medium term, but contingent to an improvement in the general economic and sanitary environment.”

Desert drive

One would have thought that beach-side resorts would hoover up much of the staycation demand. While they have done well, the big winners have been those hotels slightly removed from all the popular hotspots.

Hotels located well within the country’s desert landscapes benefited the most from the pandemic - and have registered above 60 per cent occupancy and even better during the weekends. That’s according to Wooller of STR.

“Clearly people have felt this hotel type and destination is a safer option,” he added.

In comparison, beachside properties average 30-40 per cent occupancy, while those on the Palm have touched 50 per cent during weekends.

Any improvement is welcome

But those numbers are downright healthy compared to what it was in April. Across Dubai’s hospitality sector, occupancy has picked up to 34 per cent from an April low of about 18 per cent. A parallel recovery of sorts is also happening in the northern emirates. Abu Dhabi has weathered the storm by averaging around 55 per cent occupancy through the pandemic, according to these estimates.

The Chedi Al Bait is Sharjah sees the situation as “getting better and we see a continuing rise in staycation demand,” said a spokesperson

The hotel, which is also receiving international booking requests, said “a lot of” guests were accommodated during the Eid holidays. Several travelers opted for dates before and after the festival weekend to cut down on exposure risks.

Weathering the worst

Across the industry, the impression has taken hold that hotels have weathered the worst of it. If after September, there is even the slightest pick up in events and conferences in Dubai, it could make for a relatively busy fourth quarter.

But it would take much more for room rates to recover. Gains by October or November seem too short a span for such a recovery, according to some.

However, if occupancy levels stay upwards of 50-60 per cent for the coming weeks and months, that would be a victory by itself.