(MENAFN- Khaleej Times)
Dubai's tourism sector retained its global appeal in the first half of this year, with a 9.3 million tourists arriving in the city, representing an increase of 9 per cent on H1 2023, data showed on Wednesday.
Citing STR data, Knight Frank says that between January and May 2024, the UAE emerged as a standout performer, with an average hotel occupancy rate of 80 per cent - the highest level in the region. This figure was matched by revenue per available room (RevPAR) levels of $155. As of the end of H1 2024, the UAE remains the largest hospitality market in the GCC, with current hotel stock standing at 212,000 quality hotel rooms, 154,000 of which are in Dubai alone. Assuming the planned completion of ongoing construction, Knight Frank expects this supply to increase by 10 per cent to 232,000 keys by 2026.
According to Knight Frank data, Dubai was the third most visited city in the world during 2023, with 17.2 million visitors to the city's 154,000 hotel rooms.
Not to be outdone, Saudi Arabia emerged as the world's 13th most visited country during 2023, with 27.4 million visitors, just behind the UAE (28.2 million visitors).
Overall, the travel & tourism sector injected a $223.4 billion to the GCC's GDP, underpinned by the 76.2 million tourist arrivals to the region, who together spent $135.5 billion, up 45.3 per cent on 2022.
The hospitality sector across the GCC has experienced impressive growth in occupancy levels and average daily room rates (ADR) over the last few years, supported in big part by strategic government initiatives and substantial investments in tourism, leisure, hospitality and aviation infrastructure. The sector plays a pivotal role in many of the GCC's transformation and vision programs such as Vision 2030 in Saudi Arabia, which is forecasting 150 million visitors to the Kingdom by 2030 and Dubai Economic Agenda (D33) in the UAE.
Faisal Durrani, partner – head of research, Mena at Knight Frank, said:“The synergy between a robust economy and a dynamic, vibrant hospitality and tourism sector is evident across the region as the GCC states collectively pursue an economic future that is far less reliant on oil than it is today. The UAE and Dubai, in particular, has blazed a trail in this regard with the travel and tourism sector now accounting for around 11.7 per cent of UAE's economy, proving not only that it can be done, but creating a blueprint for other markets in the region to build on and adapt”.
Saudi Arabia recorded an average daily rate (ADR) of $198 and a RevPAR of $127, despite a more modest average occupancy rate of 64 per cent. As of the end of June, the Kingdom's current hotel stock stood at 159,790 quality hotel rooms. With ongoing construction, Knight Frank is forecasting this supply to rise by 29 per cent to 205,500 by 2026, assuming projects are completed as planned. Riyadh alone is poised to experience a 46 per cent increase in quality hotel rooms to 32,500 by 2026.
lsewhere, the tourism sector in Qatar continues to show promising growth, following the successful hosting of the world's largest soccer event and witnessing a remarkable 58 per cent surge in visitor numbers to 4 million in 2023, compared 2.6 million in 2022 (PSA). Notably, 28 per cent of these visitor's hail from other GCC countries, Knight Frank points out.
As a result of the increased influx of tourists, the hotel performance indicators in Qatar have improved steadily between January and May this year. The ADR increased by 8.3 per cent to $127, while average occupancy levels increased by 33 per cent to 70 per cent. As a result, RevPAR grew by 44 per cent to $90 (STR).
Turab Saleem, partner and head of hospitality, tourism & leisure advisory, MEA, says:“Tourism and hospitality has emerged as a pivotal sector in the region, contributing to job creation, fostering international collaboration, and enhancing the global profile of the GCC. Notably, in 2023, the travel and tourism sector supported over 2.6 million jobs across the region, underpinned by a total of 464,465 hotel rooms.”
Kuwait, Knight Frank says, faces challenges with the GCC's lowest occupancy rate (42 per cent), despite having the second highest ADR of $197 in the region. Around 200+ hotel keys were added to Kuwait's total quality stock of around 10,300 rooms, with no additional rooms due to be completed this year. The quality room supply in Kuwait is expected to reach 10,770 keys by the end of 2026.
In Bahrain the hospitality sector has shown resilience and growth. From January to May this year the ADR increased by 7.1 per cent to $181, while average occupancy levels rose by 2 per cent to 54 per cent. Consequently, the RevPAR grew by 11.3 per cent to $98 (STR), signalling a robust recovery and promising future for Bahrain's tourism sector. The overall hotel room supply has continued to expand, with current figures showing approximately 19,000 quality room keys available, a slight increase over previous years. By the end of 2026, the quality room supply in Bahrain is expected to reach 20,600 keys.
Supporting the growth of the hospitality sector across the GCC has been the rapid rise of the cruise industry as the Middle East establishes itself as a burgeoning tourism hub, marked by the inauguration of new cruise ship terminals across UAE, Oman, Qatar, and Saudi Arabia. Having hit a total revenue of $200 million last year, the projected cruise industry growth in the GCC is forecast grow by 9.9 per cent per year for the next five years.
According to Knight Frank, GCC's current hotel stock stood at 464,465 quality rooms as of the end of June 2024, of which 46 per cent (212,000 keys) are in the UAE and 34 per cent (159,800 keys) are in Saudi Arabia. With ongoing construction, this supply is expected to increase by 17 per cent to 544,250 by 2026, assuming projects are completed as planned.
Future outlook
The large promotion of world-class cultural and entertainment offerings planned across the region is expected to play a critical role in attracting international and domestic tourists to the GCC, helping to reshape the regions hospitality landscape.
Amar Hussain - associate partner, research, ME, concluded:“The scale of the GCC region's tourism ambitions is further amplified when we consider the mega events set to be held across the Gulf. Riyadh, for instance, winning the bid to host the 2030 World Expo is expected to inject an economic boost of $94.6 billion into the nation's capital, with an estimated 40 million visitors expected during the six-month exhibition. In addition, Saudi Arabia is the sole bidder for the 2034 FIFA World Cup, while also being the host nation for the 2029 Asian Winter Games”.
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