More hotel rooms are coming to the UAE, but growing visitor numbers and new demand generators are expected to keep the market buoyant.
Market sentiments among hoteliers in the UAE are as bullish as the room pipeline in the country. Despite seeing rate pressure amid a heightened supply, industry executives expect improved inbound numbers and new products will keep the sector buoyant.
According to a report by Colliers International, hotel developments in the UAE significantly rose in 2017 with approximately 6,000 rooms added, up 8.2 per cent from 2016. The UAE is expected to have more than 170,000 hotel rooms by 2020.
Chris Hewett, director at TRI Consulting, estimated that RevPAR in 2018 could drop by as much as seven per cent.
However, hoteliers in the UAE remain unperturbed, confident that demand will continue to grow on the back of new feeder markets and stronger marketing efforts from the tourism board.
“The market is more competitive now as many new hotels have been added to the inventory. We are not seeing a decline, but a bit of pressure on rates because of the supply,” shared Mark Kirby, general manager, Armani Hotel Dubai.
“Overall, growth in the Chinese market has helped to absorb the pressure. We are also seeing an increase in demand from new markets like the US, Brazil, South Korea and Japan,” he added.
Positive market sentiments are also reflected in the robust expansion plans of hotel chains already operating in the region.
For instance, AccorHotels will debut the luxury So/Sofitel brand in the Middle East when So/Uptown Dubai opens in 2020, while UAE-based hospitality chain Rotana has opened two new hotels in Dubai this year, and is preparing to open up another in Abu Dhabi as well.
“With continuing investment in infrastructure and appealing tourism offerings, Dubai will continue to attract both business and leisure tourists,” stated David Prince, Rotana’s area vice president.
Sharing similar sentiments, Pradeep Kumar MG, corporate vice president finance, Roda Hotels & Resorts, commented: “The government of Dubai is doing a lot of promotion and we expect tourism inflow will grow strongly in the coming days. There has been a slight change in RevPAR but average occupancies remain strong.”
Meanwhile, hotels in Sharjah recorded a 70 per cent occupancy rate from January to June last year. The emirate is looking to add an additional 1,000 four- and five-star rooms and suites by end-2020.
The Ras al-Khaimah Tourism Development Authority aims to have 10,000 hotel rooms in the destination by 2020, up from the current 5,400.