News and Events

July 2018

UAE hospitality industry to take flight in second half.
Sector remains positive on growth boosted by new policies and spending. The UAE's hospitality industry is upbeat on the second half of 2018 and ready to welcome 2019 on a positive note. The sector has received massive support from the government in terms of new policies, opening of new tourist destinations, exemption from value-added tax (VAT) for tourists, preparations for Expo 2020 Dubai - these are some of the prime growth drivers that will steer forward the growth trend.

The UAE hospitality market is expected to reach $7.6 billion by 2022 at a five-year CAGR of 8.5 per cent (2017-2022) and international tourist visits are expected to grow at a five-year CAGR of 4.3 per cent to 25.5 million whereas the hotel supply is expected to grow at a five-year CAGR of 6 per cent to 183,718 hotel rooms, shows Alpen Capital's latest report on GCC Hospitality Industry 2018.

The UAE, led by Dubai with a volume of new developments in the Middle East, has over 200 projects underway showing GDP growth for hotels and restaurants of 8 per cent year-on-year. Dubai is currently the home to 104 five-star hotels, and we can expect the Emirates' hospitality sector to experience a strong, sustain growth over the coming years with occupancies to reach 35.5 million annually by 2019, representing a 10.2 per cent compound annual growth rate over the next 24 months," points out Arshad Kazi, money master at Xpandretail.

"We are in an era of a shared economy. The change will require a new strategic approach, one which can enable hotels to understand market trends and build the internal capabilities required to succeed in a new landscape. The more the products and services are tailored to offer local experiences and value for money, the better conversion can be expected. There is a strong need to build on experiential travel and hospitality today."

The average daily rate is expected to grow at a five-year compound annual growth rate (CAGR) of 1.3 per cent to $149 until 2022, whereas revenue per available room is expected to grow at a five-year CAGR of 2.1 per cent to $116 by 2022.

Dubai is expected to witness 20 million international tourist arrivals by 2020 and its hotel supply is expected to reach 132,000 by 2019, which also includes the mid-market hotel segment which targets budget travellers.

Raj Sahni, owner and founder of RSG group of companies, said: "As Dubai expands its tourism industry, we see a greater need to enhance our services. Digital disruption has become the single-greatest change in the last decade. With self check-in, app-based stay management and other services, we are able to align ourselves with the evolving world. There is a rise in the use of technology across operations in the industry. We also see the prevalence of a service quality on par with global standards. Already known for its innovative building, style and facilities, the industry has distinguished itself on the world stage. With the current trajectory, it will scale greater heights in the future."