Industry News & Insights

21 May 2024

UAE Hospitality: A Thriving Market

UAE Hospitality: A Thriving Market

The UAE hospitality sector is booming as airlines and hotels show strong signs of passing pre-pandemic levels, according to industry analysts at CBRE Middle East.

The investment analyst specialist has released its UAE Hospitality Market Review for the first quarter of 2024.

It identifies busier airlines and more filled hotels in the UAE.

UAE hospitality

Globally, during the first quarter of 2024, the average number of flights stood at 118,689, surpassing the 2019 pre-pandemic baseline by 11.5 per cent, and registering a year-on-year increase of 11 per cent.

In March 2024, data from IATA revealed that the global Passenger Load Factor (PLF) reached 82 per cent, marking an increase of 1 per cent from the comparable 2023 figure.

The available seat kilometres (ASKs) registered a year-on-year increase of 12.3 per cent.

The year-to-date data to March 2024 demonstrate the sustained strength of visitation in the UAE.

Abu Dhabi witnessed a remarkable surge in the total number of hotel guests, recording an increase of 22 per cent compared to the previous year, with a total of 1.3m visitors.

Similarly, Dubai experienced robust growth with a total of 5.18 million international visitors during the same period, representing a year-on-year increase of 10.9 per cent and a 9.1 per cent rise from the 2019 level.

In the year-to-date to March 2024, the UAE witnessed a marginal increase of 0.9 percentage points in the average occupancy rate compared to the year prior.

Over the same period, the country’s ADR increased by 5.6 per cent, resulting in an overall 6.8 per cent rise in the average Revenue Per Available Room (RevPAR).

In the year to date to March 2024, the UAE’s ADRs stood at 24.9 per cent above the 2019 comparable figure.

This growth has been underpinned by higher ADRs in Sharjah, Dubai, Abu Dhabi, Fujairah, and Ras Al Khaimah, which have recorded increases of 27.9 per cent, 24 per cent, 18 per cent, 11.1 per cent, and 1.9 per cent, respectively.

As a result, we have seen these cities’ RevPARs outperform their 2019 pre-pandemic levels by 34.3 per cent, 22.3 per cent, 19.7 per cent, 40.6 per cent, and 3 per cent, respectively.

In terms of citywide occupancy, the majority of locations have exceeded their 2019 pre-pandemic levels.

Strong performance is expected to continue in the UAE’s hospitality sector over the remainder of the year, as the elevated visitation levels will likely be maintained given a number of key upcoming local and regional events.

Taimur Khan, Head of Research MENA in Dubai, comments: “The UAE’s key performance indicators continued to showcase resilient performance in the first quarter of the year, largely supported by the elevated visitation levels.

“Over the remainder of the year, we expect that visitation will see a marked increase owing to several events, which are expected to continue to drive occupancy and rates to record levels.”

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