Stock Dubai skyline
The Chinese tourist inflows should make for a compelling growth story as far as Dubai's hotels are concerned. Image Credit: Dubai Media Office

Dubai’s hospitality industry witnessed a bullish 2022, with occupancy rates closely following some of the top cities in the world. In fact, the ‘KPMG Dubai Hospitality’ report revealed the city registered the highest hotel occupancy rate in 15 years by the end of Expo, with tourism contributing $29.4 billion to the economy in 2022.

This post-pandemic revival is in stark contrast with many tourism-reliant economies around the world that struggled to rebound. The study found out the possibility of consumers booking a hotel in Dubai has increased by more than 20 per cent compared to 2021. A majority plan to stay again in a Dubai hotel in the future.

While global headwinds of inflation and recession may potentially impact room rates and occupancy, Dubai’s hospitality sector performed exceptionally well in 2022 and seems poised for growth in the coming years. New visa rules easing travel and increasing consumer satisfaction – with an overwhelming 92 per cent of residents satisfied with their hotel stays in 2022, a 5 per cent increase from 87 per cent in 2021 are more positives. Here are the key trends that will shape Dubai’s hospitality landscape this year:

The return of Chinese tourists

Three years after China’s borders were shut at the start of the COVID-19 pandemic, the country has lifted restrictions on inbound travellers, including the removal of quarantine for returning residents. This is expected to lead a global tourism boom from over 150 million Chinese tourists. Lifting the zero-Covid policy has already seen a surge of overseas travel bookings, soaring 540 per cent from the previous year.

As national airline companies plan to increase flights between the UAE and China and Dubai now ranked on TripAdvisor as the world’s most popular destination for holidaymakers, the city is preparing to welcome Chinese tourists alike.

‘Once in a lifetime’ experiences

Dubai has seen a surge in exciting new tourism and hospitality projects, with larger-than-life tourism and hospitality projects, such as the Ciel – the tallest hotel in the world – to be completed by 2023. Several upmarket hotels are in the pipeline to cater to a growing breed of travellers seeking a range of different experiences under one roof.

The newly opened Atlantis, The Royal, for example, features 231 apartments and 693 hotel rooms for guest hoping to experience a new level of luxury.

Travellers are also seeking once-in-a-lifetime experiences, which Dubai excels at. For example, the 17-square kilometre Dubai Islands by Nakheel are expected to have more than 80 hotels, including luxury and wellness resorts, as well as boutique, family, and eco-conscious hotels. We anticipate Dubai will feed the demand for travel that offers the right mix of retail, entertainment, and leisure products.

Marquee global and local events – a magnet for leisure travel

The UAE and Dubai are no strangers to big-ticket international events, with Formula 1, the NBA Games and UFC 280 contributing to the hospitality industry’s exceptional performance in the past. The FIFA World Cup in Doha also rejuvenated the hospitality sector.

The Dubai Desert Classic at the Emirates Golf Club has a number of top golfers as the tournament is now part of the DP World Tour’s Rolex Series for the first time. These events, along with marquee local attractions, like the Dubai Shopping Festival (DSF) and Gitex, where the latter generated Dh2.6 billion in total economic output in 2022, will fuel the hospitality industry in 2023 and beyond.

Uptake in technology to deliver enhanced personalisation

Digitalisation remains a priority area for the hospitality industry. KPMG research shows that 67 per cent of operators believe technology has significantly transformed their business over the last few years. Customers benefited from technologies like contactless check-in, where keys are received on mobile phones.

With most customers now comfortable with online channels and contactless payments, hotels are likely to increase investments in digitalising communication and payments, while prioritising digital security. Two-thirds of Dubai’s MICE operators surveyed by KPMG witnessed a significant transformation in their business over the past few years as a result of technology.

Today’s guests also expect more personalisation. Hotel operators will need to continue to go to the extra mile to deliver this through data management and analytics, enabling hotels to tailor their offers and promotions to provide similar services to previous stays.