The hospitality industry has been one of the most impacted industries due to COVID-19. With lockdowns and travel restrictions in place, hotels and entertainment establishments were forced to close their operations in the early stages of the pandemic. Dubai is no exception. With the emirate hosting more than 15 million tourists yearly, businesses were delighted to reopen beginning Q3 of 2020.
Overall, hotels in the UAE did quite well. Occupancy rates of 5-star hotels went from 75% in 2019 to 45% in 2020. This is a strong performance given that hotels are just permitted to cater 50% of their capacity.
In terms of pipeline, there are 153 new hotel projects planned to be built in the next 5-7 years and more than 70 projects are lined up for this year. The familiar hotel brands will expand their operations in Dubai including Millennium Hotels, Rotana, Holiday Inn, and local Jumeirah Hotels & Resorts.
The increased number of hotel rooms and facilities will be timely for the demand spike expected from:
- Expo 2020 – the long-awaited global event is set to finally take place 1st October 2021. The event is expected to draw million visitors from 180 countries.
- Re-opening of the rest of the world – with vaccination rates picking up globally, optimism in opening the borders is being expressed by hotel owners. This would entail a rebirth of the tourism and hospitality industry in the country.
- Dubai 2040 Urban Master Plan – Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and ruler of Dubai, recently announced the emirate’s vision to accelerate sustainable urbanization in Dubai to provide the best quality of living to its residents. The roadmap includes development of spaces to envisage culture, leisure, and business altogether.
All of these trends are of course reliant to consumer behaviors and willingness. There are still lingering questions whether business travels will get back to its previous levels or if people will be “travel-thirsty” and jump on the next available flight to anywhere whenever that is possible. We would still need more time to be able to answer these questions.
2020 surely posed challenges in Dubai’s hospitality industry, but all signs point towards a more vibrant and faster recovery. Please contact us to learn more on how we support and connect you with partners within the hospitality sector in the UAE.
About the Author:
Danilo Batinga
Consultant
LinkedIn: Danilo Batinga