Hotel property performance in Dubai 2014

Hotel property performance in Dubai 2014

Dubai offers investors a lucrative opportunity in terms of the hotel property, as the number of guests staying continues to increase due to the plethora of events being hosted by the region, meaning growth is showing little signs of slowing down.

The figures from 2014 concerning the sector's performance reveal stable year-on-year expansion, with 13.2 million guests recorded last year, marking a 8.2 per cent increase compared to 2013 according to new statistics issued by Dubai's Department of Tourism and Commerce Marketing. This rise indicates that the industry continues to be healthy and there is room for further development and growth, suggesting now could be the right time to invest in the emirate's hotel property.

On track to meets its goal

In May 2013, his Highness Sheikh Mohammed bin Rashid Al Maktoum, vice-president, prime minister of the UAE and ruler of Dubai, announced that he wants 20 million tourists to visit the emirate every year by 2020. At the time, he said: "We are aware that such goals are ambitious, but more important than ambition is realising these goals in reality."

It appears that this vision is well on its way to being achieved, with the Department of Tourism and Commerce (DTCM) describing 2014 as a banner year for Dubai and its tourism industry as more guests than ever before stayed in its hotels.

Top guest source markets for the emirate last year were very similar to 2013, with Saudi Arabia coming first, followed by India, the UK, US, Iran, Oman, China, Kuwait, Russia and Germany. 

In a statement, Helal Saeed Almarri, director-general of the DTCM, said: "The 2014 figures demonstrate healthy year-on-year growth for hotel establishment guest numbers, with significant increases from Asia, Africa and Western Europe.

"The strong growth in hotel guests from China is hugely positive and reflects our targeted work in this market."

Attracting different kinds of tourists

One of the reasons Dubai's tourism and hotel industries are thriving is the emirate's ability to attract different types of visitors as it has positioned itself in such a way that it is able to cater to these groups' unique needs.

For example, the government has launched several projects aimed at specifically enticing families to its shores, including three new theme parks, museums, retail destinations and sporting venues - all of which will keep those travelling to the emirate for leisure entertained during their trip.

Dubai is also working hard to keep meetings, incentives, conferences, and exhibitions (MICE) tourists happy, with the region emerging as one of the world's most popular destinations in 2014, according to global events organiser Pacific World.

Harsha Krishnan, strategic development director at the firm, said the success of the emirate and wider UAE was due to two key factors: Dubai being perceived as a well-placed location geographically and new flight routes being launched that connects the region to more of the world, including Chicago, Boston, Oslo, Brussels, Kiev, Taipei and Kano.

Jestine Alfred, destination manager at Pacific World, added: "Dubai is an ever-changing city which attracts a lot of repeaters due to the fact that there is something new all the time. The city and the key MICE players have been able to create and keep the interest for the destination investing in new hotels and attractions, developing new products for incentives and meetings."

Healthy revenue

In 2014, the average length of stay in Dubai's hotels increased from 3.78 to 3.84 days, meaning guests are checking in for longer periods of time, leading to boosted revenues for operators and investors.

Last year, yields from this type of property experienced significant growth, reaching AED23.9 billion (£4.35 billion), marking a ten per cent rise versus 2013. Mr Almarri commented: "Growth in revenue is notable, considering the 9.2 per cent increase in available rooms in Dubai during this period."

He added that the figures for 2014 indicate that Dubai's hospitality industry is in a healthy state and, most importantly, is experiencing growth that is sustainable, which is crucial when it comes to the emirate reaching its tourism target by 2020.

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