Damac expects strong occupancy rates at its hotels as it seeks to boost UAE portfolio

Tourism recovery and new visa policies in the UAE as well as the World Cup in Qatar are driving an influx in visitors, senior executive says

Damac Hotels and Resorts currently operates four properties in Dubai. Jeffrey E Biteng / The National

Damac Hotels and Resorts, the hospitality arm of Damac Properties, aims to expand its portfolio in the UAE and is looking at opportunities abroad as it expects "strong" occupancy rates at its properties this year.

The company will open a new hotel in Dubai at the end of the year in partnership with Rotana group and another hotel at Damac’s Aykon City, Damac’s senior vice president of hospitality Jean Faivre told The National in an interview.

“In terms of expansion, we are always very keen to look at new opportunities. We are opening Navitas Rotana at the end of the year, and beginning of next year, we are looking at opening Aykon City on Sheikh Zayed Road,” Mr Faivre said.

Outside the UAE, “we have a number of opportunities we're looking at, that I would like to keep the mystery for now because it's still under finalisation”.

In Dubai, Damac’s hospitality unit currently operates seven properties including Paramount Midtown, Damac Tower by Paramount Hotel Dubai, Radisson Hotel Dubai Damac Hills, Damac Maison Cour Jardin, Damac Maison Distinction, Damac Maison Mall Street and Damac Maison Canal Views.

Its portfolio includes more than 5,000 rooms, and 300 more will be added after the Navitas Rotana is opened later this year.

Dubai’s tourism sector has rebounded strongly from the impact of the coronavirus pandemic on the back of government initiatives as well as the successful hosting of Expo 2020 Dubai and other events this year.

The emirate hosted 7.12 million international visitors in the first half of 2022, about three times the 2.52 million tourists recorded in the same period last year, according to official data.

Across the wider UAE, the tourism sector’s revenue exceeded Dh19 billion ($5.17bn) during the first half of this year and the total number of hotel guests during the period reached 12 million — an increase of 42 per cent, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said this week.

The UAE, the Arab world’s second-largest economy, expects a “strong tourism recovery” this winter, he said.

“Our indicators today are stronger than our indicators before the pandemic, and our economic growth is faster than before the pandemic, and our tourism, commercial and development sectors are larger than before the pandemic,” Sheikh Mohammed said on Twitter.

Damac recorded more than 70 per cent occupancy levels at its hotels in Dubai in the first eight months of the year, up 20 per cent compared with last year, Mr Faivre said.

It expects to close the year at 75 per cent to 78 per cent occupancy levels amid an influx of new tourists to the emirate, he said.

The recovery momentum is expected to continue on the back of new visa rules and the likelihood of more football fans arriving in Dubai from neighbouring Qatar as the Gulf country hosts the FIFA World Cup in November.

“We are confirming what Sheikh Mohammed has been saying, that [it] is an extremely strong market," Mr Faivre said.

“We're looking at having a very strong ‘vigorous gearing up' to host the football fans … we have two months to go and with all the activity which is taking place in Dubai to host the fans, we are certainly looking at very strong occupancy and revenue not only in terms of hotel occupancy, but also in terms of food and beverage and all other revenue. So we are very positive for the balance of the year.”

The UAE's new visa rules, which allow visitors and holidaymakers to enter and stay for 60 days in the UAE instead of 30 days previously, will also have a positive impact on boosting occupancy levels, Mr Faivre said.

Damac's hotels have been receiving guests from GCC countries, the UK as well as Israel. Several domestic travellers have also checked into its properties in line with the staycation trend that picked up pace during the pandemic.

“We are having a lot of customers and visitors from Israel … very strong demand from there and also local domestic demand and [from the] GCC with the change and the drop of barriers [related to Covid-19]," Mr Faivre added.