Dubai hoteliers optimistic as boost from Expo 2020 nears

A glut of hotel rooms ahead of the world fair will soon begin to fill, industry experts say

About 15,000 new hotel rooms have come onto the market between 2017 and 2019

A glut of hotel rooms that have come onto the market ahead of Dubai Expo 2020 will begin to fill up soon, hoteliers said as they expressed optimism for a strong winter 2019/2020.

Their comments came after figures released by industry analysts STR showed 67.1 per cent of hotel rooms were filled in the second quarter of 2019, down 0.9 per cent from the first three months of the year and the lowest  rates since 2009.

The average daily rate of a room, at Dh513.73, is also the cheapest since 2003.

Hoteliers said the decline in occupancy was due to a spike in new hotels being opened ahead of the expo, when an estimated 25 million people are set to converge on the emirate.

According government's Dubai Statistics Centre, there were 93,300 hotel rooms in the city at the end of March, up from 79,800 rooms in 2017.

Moving into the cooler weather with the opening up of Dubai's multitude of outdoor activities will always represent an upturn in occupancy and rates

“The economy is becoming more challenging internationally, it’s not just here,” said Nila Pendarovski, hotel manager at Rove Dubai Marina.

“But if you compare Dubai to other countries around the world, you will see it is doing rather well.”

She said the key to success was for hotels in the emirate to ensure they were offering deals that nobody else was, and defining themselves as a unique brand.

“It is no good being all things to all people as it doesn’t work and you will be found out,” she said.

“That’s especially the case in this market.”

One aspect that would work in favour of Dubai hotels was the sector’s focus on sustainability.

This was a key factor in millennials and generation Z tourists, who were born during the mid 1990s to early 2000s, choosing their next holiday destination, she said.

The spectre of Brexit was another concern for the industry, according to commentators, who felt that an ever-declining sterling would result in tourists from the UK finding it difficult to justify coming to Dubai, as they could fall foul of exchange rates.

“There is a slight degree of concern about Brexit, but there is a slight degree of concern about a great many things to be honest,” said David Allan, cluster general manager at Radisson Blu Hotels, Dubai Waterfront and Dubai Canal Views.

“There have been some tough numbers for Dubai recently but no worse than the rest of the world.

David Allan, cluster general manager at Radisson Blu Hotels, Dubai Waterfront and Dubai Canal Views, said supply is being currently outstripping demand. Pawan Singh / The National

“If you are offering the right service, value for money and giving the best possible impression you can, then you on the right track – I believe the future for hotels is relatively rosy in Dubai.”

He was also relaxed about the recent occupancy figures, putting them down to a “maturing market”.

“The market is maturing and there are challenges but it’s no different from the rest of the world,” he said.

“I would be very surprised if the challenges were not more prevalent elsewhere.”

He said that demand for hotel rooms in Dubai was actually growing, something which bode well for the long-term future of the industry in the region.

“There has been an increase in supply ahead of Expo 2020, while overall demand has actually been growing. Supply is currently outstripping demand.”

According to figures released by Dubai’s Department of Tourism and Commerce Marketing, the emirate welcomed 6.26 million visitors in the January-April period of 2019.

This was up from 6.09 million from the same period in 2018.

Another reason why hoteliers should be positive was the winter weather in Dubai, according to Caroline Rowe, who has worked for several hotel groups in the region, in recent years, as a brand marketing manager.

“Moving into the cooler weather with the opening up of Dubai’s multitude of outdoor activities will always represent an upturn in occupancy and rates,” she said.

“Each year there are numerous new things to see and do in the emirate and the attraction of brand Dubai grows stronger and stronger globally.

“It is and will remain high on the “must visit” list of huge numbers of people around the world.”

She expected the number of visitors to Dubai to only increase as the countdown to Expo 2020 continued.

“The run up to Expo 2020 is full of excitement and we will see more museums, more developed beach-side walks, more sporting facilities and more international quality leisure attractions,” she said.

“There is so much to be said for Dubai as a long term destination.”