Dubai: Anyone trying to make a last-minute booking for a hotel room in Dubai this weekend would have been disappointed. Not only were top hotels and resorts in the city charging Dh2,500 and well above for a night, there weren’t many rooms available either.
As for hotel operators and owners, things are only going to get better. This weekend sets them up for a 3-month run that could see occupancy rates in Dubai’s hotel sector consistently scoring around 90 per cent. And with 100 per cent well within the realms of possibility. (Staycation guests are one reason why occupancy levels have shot up in this 3-day cycle.)
And with hotel room rates to match - even with Dubai absorbing as many as 2,215 new rooms to its existing total between December 2022 and end of August. This many addition to the capacity hasn’t had much of an effect in bringing down room rates. (Where tariffs have dropped, it hasn’t been by much and had more to do with that particular hotel or area rather than a city-wide trend for the hotel sector.) According to the hospitality industry data analytics company STR, as of July-August, 831 hotels in Dubai offering 148,711 rooms.
According to a new Knight Frank report, Dubai will see its overall hotel room capacity close 2023 with around 154,000 units - which on the face of it looks good to meet all possible demand spikes.
But can it?
That’s because the upcoming COP28 global sustainability conference the UAE is playing host to will make for one big performance boost for hotels in the city.
“All our properties are showing strong business on the books going into Q4-2023,” said David Garner, Vice-President of Commercial Minor Hotels at MEA.
The key is how the booking channels and market segment mix are managed to leverage every opportunity and drive profitability (for the hotels).
And it won’t just be COP28 feeding demand.
There will be the tech trade show Gitex, the biennial Dubai Airshow, the Rugby Sevens, the Formula 1 in Abu Dhabi, and then December takes care of the peak end-of-year festivities.
Even with the additional rooms. it is expected that rates will rise considerably in November and December, with some luxury hotels charging Dh2,500-Dh300 for a one-night stay during the opening weekend of COP28, according to available data.
No longer about 70-80% occupancy
Hoteliers are supremely confident that occupancy will zoom to 90 to 100 cent through the next 3 months. James Britchford, Vice-President of Commercial, IMEA, IHG Hotels and Resorts, doesn’t have any doubts.
Our occupancy levels in the UAE are expected to approach approximately 90 per cent during the peak season, driven by a diverse mix of leisure and business travellers
Hotels report robust forward bookings from the UK, Saudi Arabia, Germany and Russia. “Guests from these countries are coming to spend leisure time with their families and friends - and planning to stay longer,” said Lucie Velcovska, Commercial Manager at DoubleTree by Hilton Dubai, Jumeirah Beach. “The majority of our guests tend to book approximately 30 days in advance.”
During major events or end-of-year festivities, the booking window increases to 90 plus days in advance to secure their room. Overall, our outlook for Q4-2023 looks better in comparison to the same period last year.
According to Dubai Tourism, average occupancy for the emirate’s hotel and hospitality sector during January-August stood at 74 per cent, representing a slight drop from the 79 per cent registered in the pre-summer (January to April) phase. Five-star properties were averaging occupancies of 80 per cent.
For the upcoming season, hoteliers are banking on MICE (Meetings, Incentives, Conferences, and Exhibitions) to close out the year on another high. It would be a third straight year when the Dubai hotels would have done so.
With all the upcoming events, we have the highest number of forward bookings from the corporate sector.
Throw in all the leisure-chasing travellers landing in Dubai in the coming weeks, and one gets the sense Dubai hotels won’t be having much room to spare...
Check out the hotel rates
This weekend rates for a two-night stay in hotels on Palm Jumeirah average Dh2,245-Dh3,234, while Downtown Dubai properties average Dh1,100-Dh2,689. During August and first-half September, Dubai’s hotel room rates decreased by 8 per cent.