Growth in Numbers of Tourists in UAE Does Not Mean Growth in the Hospitality Sector

Published: 04 June 2018
Growth in Numbers of Tourists in UAE Does Not Mean Growth in the Hospitality Sector
@ Media

Reports about the increased number of tourists in the UAE, namely in #Abu_Dhabi and #Dubai, are regularly published in local and regional media, citing that official figures show positive growth in tourism by 3.6 per cent in Q1 2018 compared to the same period last year.

It is always good to see positive growth in any sector, which generally means good news for the country. But looking closely into the #Dubai_Tourism 2018: Performance Report published on the #Dubai’s Department Tourism & Commerce Marketing’s (#DTCM) website, we see a totally different scenario.

While the overall number of tourists coming to #Dubai is higher, the impact on individual hotels is negative because of the increased supply in hotel rooms. We are witnessing a flat occupancy year-on-year (4 per cent increase in total occupied rooms matched by an equal percentage of increase in supply) and a 2 per cent decline in the rates.

At the same time, having the good fortune of operating in different sub-markets of #Dubai (the Palm Jumeirah, Jumeirah Beach and Sheikh Zayed Road), we constantly look at the industry performance in each of these sub-markets of #Dubai. Our findings indicate that, while Jumeirah Beach has seen an increase of 3 per cent in occupancy, the volume in other areas has either remained flat or seen a substantial decline close to 6 per cent on Sheikh Zayed Road. The average rates of hotels have also declined year-on-year between 8 to 12 per cent in the different sub-markets.

It is not surprising that hotel owners in #Dubai are concerned and stating the opposite of what is being published as they are in a situation where they bear the losses in a highly competitive market.

While the city achieves a higher number of tourists through enormous marketing and promotional efforts, this is all erased by the impact of the increased number of rooms in the city, and all the achievements are diluted since they cannot be translated into monetary value and quality of service to the guests.

We need to raise alarm bells in regard to launching new hotels. If the trend of granting permissions for new hotels continues, all the efforts of #DTCM and other government departments will go to waste.

While it is always good to maintain positivity and look to the future with optimism, publications of repute should remember their responsibility of fair reporting and should always give the complete picture before publishing reports and quoting official numbers or statements.

* Relevant links

#Dubai_Tourism 2018: Performance Tourism

#Dubai, #Abu_Dhabi report 3.6% growth in tourism during Q1 of 2018

The increase in revenue from hotel rooms ranged between 3.9 and 4.8 per cent in both emirates

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