Dubai Tourism: Market dynamics are normalizing

Shady Elborno - Head of Macro Strategy
Published Date: 22 September 2021


We expect Covid-19 restriction mandates to increasingly move towards more relaxation, if the global balance of vaccination uptakes is maintained at the pace needed to prevent another wave materialising. The tourism sector in Dubai will benefit not only from easing of two-way restrictions between the UAE and key source travel markets, but also from an increasingly less restrictive global travel market. As an important global aviation hub, Dubai will benefit from transit passengers who will use Dubai as a connection point into other destinations, with the emirate actively seeking to capture those passengers for short-term visits.

Hotel occupancy in Dubai rose to 58.0% in August from 53.9% in July and 61.9% in June. Revenue per available room (RevPAR) was up 9.5% m/m in August, following July’s -19% drop, marking the first m/m rise in RevPAR since April this year. Seasonal dynamics contributed to some of the softness over summer, as staycations gave way to expats choosing to travel for vacation, and hotel operators aggressively cut prices in the preceding months to attract customers. Tighter travel restrictions imposed over the summer in some markets contributed to headwinds faced by the sector.

The y/y metrics continue to improve. Hotel occupancy was 17pp higher y/y in August 2021 while RevPAR was up by 50% y/y. Dynamics in neighbouring Abu Dhabi also improved, with hotel occupancy in the capital up 7pp y/y, while RevPAR up was up close to 5% y/y.


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