Why invest in Hotels in Dubai

05/12/2014 - Investment Advice & Tips
Why invest in Hotels in Dubai

Dubai has attracted more visitors per resident compared to any other country in the world this year, according to an annual report from Mastercard. With this upwards trend expected to continue into the peak season, which could lead to increased profits, now could be the time to invest in the emirate's hotel property market.

The end of the year is a peak season for tourists looking to ring in the new year in Dubai, this means the hotel market's performance is boosted - an attractive prospect for new investors looking for a sound venture.

Last year, Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai, unveiled his strategy to double the amount of visitors heading to the emirate to 20 million a year by 2020 and treble the tourism sector's contribution to the economy. The marketing campaigns subsequently launched are helping to make this dream a reality.

For example, the 'See You in Dubai' initiative has just been developed by the Department of Tourism and Commerce Marketing (DTCM) and Emirates Airline to boost the number of overseas travellers visiting the emirate.

Sheikh Ahmed bin Saeed Al-Maktoum, group chairman and chief executive of the airline, commented: "Our dynamic home city is developing apace, in line with Sheikh Mohammed bin Rashid Al Maktoum’s Vision 2020. Whether they’re new arrivals or they’ve been before, visitors to Dubai will always discover something new to enjoy and share in the emirate.

"Last year, Dubai welcomed more than 11 million visitors and our aim is to continue to grow these numbers by constantly enhancing every aspect of Dubai’s destination offering, making our city the top choice for all types of travellers from across the globe."

Here are a few reasons why now may the best time for you to invest in hotels in Dubai.

Dubai's in a "league of its own"

In its latest Global Destination Cities Index, Mastercard said that the emirate was heads and shoulders above other countries in terms of how many visitors it is attracting every year.

In 2014, Dubai achieved the highest ratio of tourists versus residents, with 4.8 visitors per local making their way to the emirate, leading the financial services firm to describe it as being in "a league of its own" compared to other countries. It came ahead of Amsterdam with its 2.6 tourists for every resident and London with 2.3.

Between January and June this year, Dubai's hotels welcomed an enormous 5.8 million visitors, marking an increase of one per cent compared to the same period in 2013, according to figures released by the DTCM.

Commenting on the data back in August, Helal Saeed Almarri, director-general of the organisation, said that the emirate's hotel offering continues to diversify and grow in order to meet the demand from travellers, while also broadening the markets the DTCM promotes Dubai to.

He said: “Our strategy continues to be positioning Dubai as the must-experience family destination: as such we are constantly diversifying our tourism offering and increasing our hotel portfolio to attract, and cater to, a broader market of visitors.

“We’re on target for our medium-term plans. More importantly, this growth is sustainable and we are moving in the right direction to reach our Tourism Vision for 2020 targets.”

Visitor spend

The report from Mastercard also revealed that tourists are spending more when they visit Dubai, with a total of $10 billion (£6.4 billion) spent in the last year, representing a year-on-year increase of 7.5 per cent. The emirate also ranked among the top 132 countries when it came to the highest spending by overnight visitors per resident, with the average being $3,863.

Figures from earlier this year suggest Chinese tourists and Londoners spend the most when visiting Dubai, with travellers from the east Asian country paying an average of $299.65 (£191.05) - 2.7 per cent more than pay in Honolulu and eight per cent more than New York, according to a survey from Hotels.com.

Tourists coming from England's capital are also big spenders when they come to Dubai, with figures from Mastercard revealing that Londoners spend a combined total of $1.3 billion over the course of a year in the emirate. The report also found that the number of people flying from the British city increased by 15 per cent to 881 million passengers last year, suggesting Dubai will continue to grow in popularity.

World Expo 2020

In November 2013, Dubai won the rights to host the World Expo 2020, leading to a myriad of plans being unveiled to improve upon the infrastructure of the emirate. This means that over the next five years, the additional attractions, such as the recently announced three theme park complex, will help lure more visitors to the emirate.

The already healthy tourism sector in the emirate could be set to explode, so now is the perfect to time to invest in hotels in Dubai to get a slice of the action.

Posted by Bob Brunskill