Dubai hotel investors to benefit from business travel’s booming recovery
In the wake of the COVID-19 pandemic, business travel has proven one of the travel industry’s driving forces on the road to recovery.
According to the 2023 GBTA Business Travel Index Outlook, published by the Global Business Travel Association (GBTA) and Visa, worldwide business travel expenditure rose 47% to reach $1.03 trillion in 2022, with this figure forecast to increase a further 32% this year.
The GBTA says that with business travel expenditure increasing at a faster rate than predicted just a year ago, it now expects the annual figure to surpass the pre-pandemic spending mark of $1.4 trillion in 2024 and go on to reach close to $1.8 trillion by 2027.
The Association attributes the uptick to a combination of factors including the release of pent-up demand post-COVID-19; favourable economic conditions in 2022 and 2023.
The GBTA report, which surveys 4,700 business travellers worldwide and stakeholders across 44 industries in 72 countries, is one of the most exhaustive studies of its type.
It revealed a number of key findings, including:
- Average business trip expenditure was estimated at $1,018 per traveller, with lodging and food being the major expenses. Additionally, a significant rise in blending business and leisure travel was noted compared to 2019;
- 82% of respondents felt business travel was crucial for their objectives;
- Payment trends are also evolving, with 66% of travellers provided corporate credit cards and 64% adding them to mobile wallets.
Commenting on the report’s findings, Suzanne Neufang, CEO of GBTA, said: “The headwinds that were anticipated to impact the rebound of global business travel over the past year didn’t materialise and that is good news.
“This latest forecast now indicates an accelerated return to pre-pandemic spending levels sooner than anticipated as well as growth ahead in the coming years. Business travel spending is a key indicator … the data also reflects the remarkable efforts of the industry to adapt, innovate and thrive despite the challenges, along with the ongoing role and value of business travel to economies [and] companies worldwide.”
Globally, the hospitality industry is forecast to generate more than $6.7 trillion in annual revenues by 2026, up from $3.9 trillion in 2021 to $4.5 trillion in 2022. The UAE will account for approximately 7% of this revenue generated globally, highlighting the industry’s significant growth potential over the next five years.
This aligns with data that indicates a strong rebound, especially with Dubai surpassing its pre-pandemic tourist numbers in the first half of 2023. The projected consistent growth until 2027 highlights the strong investment potential that is driving Dubai's hotel market.
Dubai hoteliers and investors to benefit from rise in business travel
Dubai has also consolidated its reputation as one of the world’s fastest-growing business travel and meetings, incentives, conferences, and exhibitions (MICE) destinations in the wake of the pandemic.
The emirate reported a 44% year on year rise in business event bid wins in the first half of 2023, according to Dubai Business Events (DBE), the city’s official convention bureau.
The 143 new MICE events secured during this period, which will be staged in Dubai over the coming years, are expected to bring more than 94,000 additional visitors to the city.
The addition of these and other events spells good news for the city’s hotel and hospitality industries, particularly for stakeholders such as The First Group, whose rapidly expanding portfolio of lifestyle hotels have proven extremely popular among business travellers thanks to their world-class guest amenities, business facilities, central location and strong value for money.
In turn, investors in the firm’s hotels, which include the fast-growing lifestyle brand, The First Collection, stand to benefit from this influx of business travellers to Dubai over the coming years.
Joining the award-winning The First Collection at Jumeirah Village Circle and The First Collection Business Bay is the newly opened The First Collection Waterfront, which boasts 327 guestrooms and suites and stunning views of Downtown Dubai and the adjacent Dubai Canal waterway.
To discover more about the benefits and opportunities of investing in Dubai’s hotel sector, download a complimentary copy of our exclusive 2023 Dubai Hotel Investment report.