Dubai hotels maintain momentum as occupancy rates surge 10% in January

Revenue per available room rose 5.7% to $171.35 during the month, says STR report

The Marriott Resort Palm Jumeirah in Dubai. The emirate's hospitality sector benefitted from the economy's rebound from the coronavirus-induced slowdown. Antonie Robertson / The National

Occupancy rates at Dubai's hotels surged nearly 10 per cent annually in January, reflecting the continued resurgence of the emirate's hospitality sector after the pandemic, industry data platform STR has said.

Hotels posted an occupancy rate of 80.5 per cent last month, from 71.5 per cent in the same month a year ago, and higher than the 76.1 per cent recorded in December, the global hospitality analytics company told The National on Thursday.

Revenue per available room (RevPar), a key gauge of performance for the hotel industry, rose to Dh629.29 ($171.35), which was a 5.7 per cent annual improvement and 10.3 per cent higher compared to the pre-coronavirus levels of January 2019.

The average daily rate (ADR), a measure of the average rate paid for rooms sold, stood at Dh781.30, it said.

Major events being held in Dubai and the influx of more tourists have boosted the industry, and this is expected to continue, Kostas Nikolaidis, Middle East and Africa executive at STR, told The National.

“On the back of a hugely successful 2022, hotel performance in Dubai so far this year is off to a great start. Compared to a year ago, the further easing of even the last travel restrictions is having a positive impact in tourism demand," he said.

"Combined with the legacy and global awareness generated by Expo 2020 as well as Dubai’s extensive destination marketing campaigns, it is encouraging to see such high occupancy in January, especially given the current hotel room inventory of 145,583 rooms in the city."

The coronavirus pandemic affected the global economy as businesses were forced to shut down and people were confined indoors.

However, Dubai and the UAE introduced proactive measures to counter the effects of the health crisis, including massive vaccination programme.

As a result, the Emirates was one of the first countries globally to reopen and resume economic activities, with the hospitality sector benefitting from the return of both international tourists and local guests.

Dubai, the Middle East's tourism and business centre, was ranked second last year on a list of the top 100 most attractive city destinations compiled by Euromonitor International.

The emirate was behind Paris, with Amsterdam, Madrid and Rome making up the rest of the top five cities in the global index for 2022.

Business activity in Dubai's non-oil private sector economy remained robust in January, expanding for the ninth month in a row as consumer demand improved, along with employment.

The emirate's economy expanded by 4.6 per cent on an annual basis in the first nine months of 2022, with wholesale and retail trade accounting for 24.1 per cent of its gross domestic product, said the Dubai Statistics Centre data.

Emirates NBD estimates Dubai's full-year growth for 2022 at 5 per cent. It expects the emirate’s gross domestic product will grow by 3.5 per cent in 2023.

The tourism sector, a key component of the emirate's economy, has made a strong rebound from the coronavirus-induced slowdown.

Dubai hosted 11.4 million overnight international visitors in the first 10 months of the year, up 134 per cent from the same period in 2021, according to the latest government statistics.

"The power of events was once again evident when occupancy peaked at 90 per cent on the last two days of [January] with the Dubai Desert Classic and Arab Health largely contributing to it," Mr Nikolaidis said.

"Hotel rates, in the meantime, are holding strong and way above [pre-pandemic] 2019 levels, in line with the robust demand flowing into the market.”

Dubai's hotels had closed 2022 with a "healthy" performance, with occupancy rates at 76.6 per cent, with ADRs pushing RevPAR "way above" the pre-Covid levels of 2019, STR previously reported.

RevPar rose 31.1 per cent annually to Dh684.03 during the year while ADRs surged more than a quarter annually to Dh892.84 during 2022, it said.

Daily data for December 2022 also showed that Dubai’s highest performance was posted on New Year’s Eve, with occupancy at 91 per cent, ADR at Dh1,765.51 and RevPar at Dh1,606.74, STR said.

Meanwhile, the occupancy rate in Abu Dhabi remained about 5 per cent lower than pre-pandemic levels, STR reported earlier this month.

Occupancy was at 72.4 per cent, slightly above January 2022's 72.1 per cent. RevPar in the UAE capital rose 6.6 per cent to Dh368.16 while the ADR surged 14.6 per cent to Dh508.45, STR said.