Dubai
With only a few months left for Expo 2020 Dubai, what does it mean for Dubai’s hospitality sector? According to the 2019 Index Hotel Markets Report, the Expo is expected to generate $44 billion (Dh161.59 billion) in revenue from tourism across the GCC.
The report says Dubai is aiming to complete 160,000 hotel rooms by October. This incoming new supply will put pressure on average daily rates (ADRs), as well as occupancy. Matthew Sexton, managing director and partner at SAY Studio, a Dubai-based design firm, says it will be a hugely competitive time for the hospitality industry.
As the market prepares to host Expo 2020 from October 20 through April 10 next year, hotel rooms are being competitively priced in an effort to stimulate demand and keep up with accelerating room supply.
According to STR’s August 2019 data, Dubai’s hospitality sector experienced a 7.6 per cent year-on-year growth in supply and a 7.4 per cent year-on-year growth in demand.
But occupancy over the same period only fell 0.2 per cent and the average daily rates dropped 12.5 per cent to reach Dh389.11. Revenue per available room (RevPAR) also recorded a drop of 12.6 per cent to Dh266.57.
Tim Cordon, area senior vice-president at Radisson Hotel Group, Middle East & Africa, agrees that the hospitality market is “not at its peak performance as it was before.”
But “there are opportunities for select hotels with the right brands and the right operating model to do really well in Dubai — as the city becomes more internationally competitive.”
Experts feel with the influx of tourists visiting and new demographics operating in Dubai, the hospitality sector is learning and adapting its strategies and offerings to tailor to the needs of that audience. “To stay ahead hotels have to constantly evaluate their offering,” agrees Sexton. He highlights three fundamental focus areas for hoteliers to remain in the running for 2020 — customisation, sustainability and refurbishments.—Courtesy: Gulf News