Dubai aims to add another 20,000 hotel rooms by next year

Dubai, which added about 7,000 rooms last year to reach roughly 90,000 rooms, is on track to reach up to 155,000 rooms by 2020 to cater to the proposed target of doubling tourist arrivals to approximately 20 million a year by 2020.

Dubai expects to add 20,000 rooms by 2016 as part of plans to nearly double its room inventory by 2020, despite a weakening global economy and a slowdown of tourists from countries such as Russia, a leading tourism official said yesterday.

Dubai, which added about 7,000 rooms last year to reach roughly 90,000 rooms, is on track to reach up to 155,000 rooms by 2020 to cater to the proposed target of doubling tourist arrivals to about 20 million a year by 2020.

Dubai received 5.8 million tourists in the first six months of last year compared with more than 11 million for all of 2013.

“We saw over 10 per cent [growth] in 2013 and I think last year was slightly below that, but definitely we are on track to deliver 20 million [tourists] by 2020,” Issam Kazim, the chief executive of Dubai Corporation for Tourism and Commerce Marketing (DTCM), said at the Destination Dubai conference organised by Meed. “We are well under way to deliver another roughly 20,000 additional rooms by 2016.”

The economic contribution of tourism, which is estimated at Dh100 billion, will treble by 2020, according to Dubai Tourism and Commerce Marketing.

DCTCM received more than 51 applications for three- and four-star hotels up to last November as Dubai offers incentives for developers to build such hotels as part of plans to become the No 1 family destination by 2020. Families typically opt for budget hotels.

“We will still have, I think, a major skew towards five-star, but there will be a huge number of three, four-star [hotels] coming to market,” said Mr Kazim.

The government is focusing on growing its key source markets, Saudi Arabia, India, UK, US, Russia and China. Although the number of Russian tourists has declined because of a declining rouble, it is being compensated by a 25 per cent increase in Chinese tourists keen on shopping, like Russian tourists, he said.

Separately, the consultancy Colliers International yesterday forecast that hotels in Dubai, particularly on Sheikh Zayed Road, Dubai International Financial Centre, Creekside and Festival City will feel most pressure on Revpar (revenue per available room) in the first quarter of this year. Hotels in Fujairah and Sharjah are projected to experience declines in Revpar, which is considered a key indicator.

“Last year, we saw a number of properties come online in these areas, in some instances we had very large hotels opening in proximity to each other which meant that there were over 1,000 additional keys within a 1 -kilometre radius,” said Filippo Sona, the director, head of hotels at Colliers International.

“This has led new hotels to target the Mice business at promotional rates, which tend to be much lower than the typical pricing strategy of hotels of the same quality. As hotels at the top end have compressed the market, hotels at the lower end have also had to lower average daily room rates to remain competitive, impacting Revpar.

“We have also seen occupancy of hotels in these sub-markets affected by the economic situation of countries whose nationals would typically be a key source market.”

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