As we noted last week, between October 2020 and April 2021, more than 25 million visitors are expected to attend Expo 2020 in Dubai. The Emirate’s Tourism Vision for 2020, a plan to help develop Dubai’s tourism industry with the ultimate goal of getting 20 million visitors to visit the Emirate each year by 2020, was approved three years ago, and has helped boost infrastructure and hotel development since then. Dubai announced initiatives for developers to open hotels in the Emirate, prompting a rush to secure permits.
And demand for those new hotels seems to be keeping pace with supply. Hotels in Dubai saw a 17.6-percent increase in occupancy to 67.5 percent last month, while RevPAR increased 7.5 percent to Dh365.08, according to STR. Demand was up 24.6 percent year-over-year thanks to a lift from Eid al-Fitr festivities.
At the submarket level, the highest absolute occupancy levels were reported in Jumeirah Palm & Beaches (74.9 percent) and the Deira & Airport Area (72 percent).
The increase in supply, however, appears to be affecting room rates: ADR dropped 8.6 percent to AED540.60 during the month.
Occupancy increased 4.8% for Middle East hotels in July, while average daily rate fell 15.9% https://t.co/N8GNfFruZn pic.twitter.com/9r8HQnoyyX
— STR (@STR_Data) August 25, 2016
The Rest of the Region
The trend was reflected throughout the Middle East, which, compared with July 2015, reported a 4.8-percent rise in occupancy to 58 percent. However, ADR was down 15.9 percent to $161.82, and RevPAR fell 11.9 percent to $93.88.
Individual countries reported widely different results.
Kuwait saw increases across the three key performance metric, with occupancy improving by 5.1 percent to 38 percent, ADR increasing 0.8 percent to KWD66.36 and RevPAR growing 5.9 percent to KWD25.21. Performance was primarily driven by a 25.9-percent increase in occupancy in the Kuwait Area submarket. However, in the Kuwait City submarket, occupancy fell 3.8 percent.
Conversely, Qatar reported decreases in each of the three metrics. Occupancy in the country fell 6.6 percent to 53.3 percent; ADR was down 0.8 percent to QAR491.68; and RevPAR dropped 7.3 percent to QAR261.93. According to STR analysts, the month’s performance was mostly affected by an 8.0 percent year-over-year increase in supply.
And then there’s Tunisia, which saw a “significant spike” in both occupancy (up 116.7 percent to 55.3 percent) and RevPAR (up 100.1 percent to TND103.37), while the country’s ADR dropped 7.7 percent to TND187.00. There’s a good reason for the triple-figure gains: In July 2015, Tunisia’s occupancy level was just 25.5 percent following the terrorist attack in Sousse the previous month. Despite the stark year-over-year percentage changes, the absolute occupancy level for July 2016 was actually the highest for any month in Tunisia since October 2014. STR analysts attribute the performance to security efforts in the country and campaigns focused on regaining tourism business. Lower rates also may have played a role in a 114.5-percent year-over-year increase in demand.