Dubai hotels to show 4.9% occupancy growth this year, 3.2% revenue rise
Posted on 20 October 2011 with no comments from readers
A new study from STR Global shows Dubai hotel occupancy rising by 4.9 per cent to 74.4 per cent this year. That compares with last year’s 3.6 per cent advance to 71 per cent occupancy. There is also good news on hotel revenues.
The average daily room rate for 2011 will be up 3.2 per cent to $223, a much better performance than the 7.6 per cent slump in 2010 to $216. The survey singled out the luxury and upscale hotels as the best performers in terms of occupancy and revenue.
Arab Spring
This confirms previous articles on ArabianMoney citing the Arab Spring as a boost to tourism this year in Dubai. Many holidaymakers have diverted from other regional locations to the safety of Dubai, fuelling demand for hotels in all categories.
The percentage figures are a bit misleading because they do not illustrate the vast increase in the number of available rooms in Dubai over the past year with many new hotels continuing to open despite the global economic downturn.
There is no sign of an end to this. Yesterday ArabianMoney inspected the sites of eight hotels at various stages of completion on the Palm Jumeirah: the Kempinski, Kingdom of Sheba, Sofitel, newly unveiled Waldorf Astoria, Royal Amwaj, Al Fattan, Oceana and Tiara hotels.
Palm hotels
Thankfully the demand for rooms in Dubai hotels seems to know no limits. The new luxury hotels on the Crescent of the Palm Jumeirah offer private beaches and Arabian Sea views as well as rapid city access while the downtown business hotels cater to every level of luxury.
However, STR Global is cautious about 2012 and predicts a very slight fall in both Dubai hotel occupancy and room rates. It says room supply will grow by 9.6 per cent and that will be difficult to absorb in a tougher global economic environment. But again to absorb this increase in current market conditions and maintain operating performance is very impressive.
Dubai hotels continue to offer affordable super luxury to global travelers due to their comparatively low building costs and sourcing of staff worldwide. Only if that competitive edge was broken would the wheels fall off this business model.
