(MENAFN- Khaleej Times)
The UAE's hospitality sector is set for further growth, with 26,832 new hotel rooms due to be completed by 2030, a 12.7 per cent increase in 2024, which will take the total number of hotel rooms to 238,412, according to global property consultancy Knight Frank's annual report.
Knight Frank expects the new supply to support the government's vision of hosting 40 million tourists by 2030. Two-thirds of the new supply, or 17,750 hotel rooms, are being developed in Dubai.
The tourism and hospitality sector grew by 26 per cent, representing 11.7 per cent of the Emirates' GDP in 2023, translating into a record-breaking Dh219 billion ($59.8 billion) of economic activity. The government has set a target to grow this further still to $123 billion target by the end of the decade.
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Citing STR data, Knight Frank says that between January and July 2024, the UAE emerged as a standout performer, with an average hotel occupancy rate of 76 per cent – the highest level in the region. This figure was matched by revenue per available room (RevPAR) levels of $131, which is 7.4 per cent higher than the same period in 2023. Similarly, the average daily room rate (ADR) increased by 5 per cent to $172, while average occupancy levels increased by 2 per cent to 76 per cent, when compared to the same period last year.
“The tourism and hospitality sector is a cornerstone of the UAE economy and has been for some time. This is best reflected in the fact that 809,000 jobs nationwide were supported by the sector during 2023, a rise of 5.3 per cent in 2022. This translates into one in nine jobs in the country, highlighting the strategic significance of the hospitality and tourism market,” said Faisal Durrani, partner and head of research for Mena at Knight Frank.
“As the D33 Agenda unfolds, there will undoubtedly be more hotel developments being unveiled in Dubai, particularly if it is to hit its 2033 target of emerging as a top 3 global destination for leisure and business. The city is already home to in excess of 151,000 rooms. Going forward, the Palm Jebel Ali and Dubai Islands, which together boast plans for 160 hotels and resorts will likely be key contributors to Dubai's 2033 targets,” he said.
According to Knight Frank, 69 per cent of existing hotel supply in the UAE falls into the luxury, upper upscale and upscale category, highlighting the importance of continued development of more mid-low hotel accommodation to cater to budgets at all levels.
Around 67 per cent of the existing supply comprises of internationally branded operators with 24 per cent belonging to local brands. By 2030, 82 per cent of the country's hotel supply will be operated under international brands, with the proportion of local brands slipping to just 10 per cent of market share, according to Knight Frank.
The UAE's top hotel operators, Accor and Marriott International combined manage over 46,000 keys in the UAE with a further 5,400 keys in the pipeline, due by 2030.
Dubai
Dubai, which is known for its luxury accommodation, has an estimated 52,995 luxury 5-star hotel rooms, and 14 Michelin-star restaurants.
“The emirate currently has just over 151,420 hotel keys, higher than London, or New York, while hotel occupancy levels have been the amongst highest in the world, averaging 77 per cent between January and July 2024,” said Turab Saleem, partner – business development - hospitality, tourism and leisure advisory, MEA, Knight Frank.
"Dubai's emergence as a prominent global tourist destination can be attributed primarily to the significant contribution of the world's largest international carrier, Emirates Airlines. Since its inaugural flight in 1985, Emirates has played a pivotal role in facilitating convenient access to Dubai, contributing to its rapid ascent on the global tourism stage. Dubai International Airport has been the world's busiest gateway since 2013 and has hosted 86.9 million passengers in 2023,” said Oussama El Kadiri, partner – hospitality, tourism and leisure advisory, MEA, Knight Frank.
“Dubai's universal appeal and constant reinvention mantra are key to draw repeat visitors, and this is what sets the city apart from many other global locations."
According to Knight Frank, Dubai is set to see the addition of 17,750 rooms by 2030.
In Dubai, the ADR increased by 3.9 per cent to Dh679 between January and July, while average occupancy remained high at 77 per cent, according to STR Global. Consequently, the RevPAR grew by 6.1 per cent to Dh569.
Daniel Pugh, Partner - Head of Hospitality & Leisure Valuation & Advisory, Knight Frank, said: "The historic twin announcements in April this year to transfer all operations from Dubai International to Al Maktoum International as well as the commencement of construction on the first phase of the new US$ 35bn airport marks in a momentous milestone in Dubai's epic rise over the last 50 years as a global commercial, trade, finance and tourism centre. Dubai's global appeal, world-class attractions, infrastructure and a plethora of outstanding accommodation options look set to be further bolstered by the addition of 17,750 rooms, driving the city's total hotel supply to 169,165 keys by 2030 – and that's what we know about so far.”
Knight Frank's analysis also reveals that the Accor Hotel Group will be the leading hotel operator in Dubai with 17,380 existing rooms under management and a further 2,700 keys planned by 2030. Marriott International with 16,620 existing rooms and 704 rooms in the pipeline set to complete by 2030, follows in second place.
Abu Dhabi has a larger development pipeline of 37,148 keys, with another 8,764 new rooms expected in Ras Al Khaimah by the end of the decade.
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