December proved an exceptionally busy phase for Dubai and UAE hotels. Now, they want a repeat - and that could soon happen as trade events, government summits and a comeback by Chinese tourists come together. Image Credit: Shutterstock

Dubai: After the 90 per cent occupancy highs in December, hotels in Dubai are hoping for a quick return to those levels as trade shows and high-profile events make a return. That would be enough to push hotel room rates higher after the dip recorded in the first two weeks of January.

“Our four and three-star properties in Deira and Bur Dubai had seen occupancy go down to 60 per cent,” said Praveen Shetty, Chairman and Managing Director of Fortune Group. “But with forward bookings, occupancy is up to 80 per cent after January 21.” This he attributes to the upcoming Arab Health and Gulf Food exhibitions.

For five-star properties in Dubai, there will be the lift provided by the World Government Summit in the coming days, and which could hold up all the way until Easter. The other big positive would be the steady return of Chinese tourists to the UAE now that Covid-related restrictions are a thing of the past for China.

MICE will deliver

But it will be on Dubai’s events and shows calendar that hotel operators will have their eyes on. Multiple sources confirm that pre-event bookings are running at their highest levels since 2019, and all that chatter about recession and inflation have not dimmed expected visitor participation.

They also point to the success notched up by Gitex Global late last year, with queues running deep to the Dubai World Trade Centre exhibition halls. A repeat success for trade shows is what’s being projected.

“This year looks strong as the MICE sector is having a sort of resurgence,” said Madisse Matar, Director of Sales and Marketing at Crowne Plaza Dubai Marina, which is hitting occupancy rates of 80 per cent plus. “With all the upcoming events, we have the highest number of forward bookings from the corporate sector.”

Closing deals in the UAE

The UAE and Gulf economies are among the few silver linings for global economic growth this year, and that’s been a consistent view across multilateral organisations such as the World Bank and the IMF. So, Madisse’s mention of demand from corporate sectors ties in with what international and regional businesses are hoping for from their trips to the UAE – more deals to happen. This is where trade shows can help, and that’s mighty fine for hotels.

January is one busy time

“The occupancy rates in our eight hotels are between 80-90 per cent,” said Richard Haddad, CEO of Ishraq Hospitality, a division of Mohamed and Obaid AlMulla Group. “We saw similar occupancy levels in December as well and we do not see a demand reduction either. Things are going to stay busy until Easter.

“The World Cup rush sustained us well into the New Year. A lot of people stayed back and enjoyed the good weather.”

The group’s portfolio includes Holiday Inn Express hotels, Crowne Plaza Deira and Crowne Plaza Dubai Jumeirah. Haddad also said that some of the properties have returned to, or exceeded, 2019 occupancy levels.

How high did Dubai hotels perform in December 2022?
Hotels in Dubai had strong showings across industry metrics during December, according to the hospital data and analytics firm STR Global. The revenue per available room (RevPAR), a performance metric for the hotel industry, ended up far above 2019 levels, according to preliminary December 2022 data from STR.

RevPar for Dubai hotels rose to Dh684 last month, up 31.1 per cent on December 2019. The average daily rate (ADR) of hotels in December increased to Dh892.84, up 33.8 per cent on pre-Covid levels in the same month in 2019, said STR.

December daily data shows Dubai’s highest performance was recorded on New Year’s Eve, with occupancy levels at 91 per cent, the ADR at Dh1,765, and RevPAR at Dh1,606. Except for four days during the month, daily occupancy levels remained above 70 per cent.

According to official statistics from the Dubai Economy and Tourism Department, the emirate welcomed 12.82 million visitors in the first 11 months of 2022, up 112.96 per cent compared to a year-ago period. During these 11 months, 794 hotels with over 145,098 rooms also opened their doors to guests, delivering strong occupancy levels of 73 per cent.

Return of the Chinese

While most hotels in the UAE are yet to return to 2019 performance levels, they are hopeful the influx of Chinese tourists, expected to arrive in some strength after January 22, will take them back to pre-pandemic occupancies. Four- and five-star hotels such as Dusit Princess Residences Dubai Marina and Palace Downtown, are charging Dh1,131 to Dh3,198 for a weekend stay starting January 27-29.

An entry-level room at Atlantis, The Palm, is priced at Dh 2,389, not including taxes. However, three to four-star budget rentals are priced at Dh350 to Dh400 in areas like DIP, Dubai Marina and Jumeirah Lake Towers. Deira and Bur Dubai’s three-star and four- star properties are going for Dh300-Dh350.

Pre-Covid, Dubai welcomed over 17 million visitors, with over 990,000 coming from China.

Thomas Kurian, Hotel Manager Leva Hotels, said, “We are expecting the hotel market to get back to the 2019 figure of one million tourists by the end of the first quarter of 2024.”