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As Covid-19 travel restriction mandates get increasingly relaxed, the dynamics of the global travel market can begin charting a clearer path towards normalization. The tourism sector in Dubai will benefit from easing of two-way restrictions between the UAE and key source travel markets, while equally importantly Expo 2020 will play an important role in drawing in tourists to the emirate over the seasonally attractive travel period of the exhibition. Dubai will also benefit from transit passengers who will use Dubai as a connection point into other destinations, given its position as a global aviation axis.
Hotel occupancy in Dubai rose to 67.2% in September from 58.0% in August and 53.9% in July according to data by STR. Revenue per available room (RevPAR) was up 10.2% m/m after rising 9.5% in August, following July’s -19% drop, marking the second m/m rise in RevPAR since April this year. Seasonal dynamics and global travel lockdowns that contributed to some of the softness over summer are giving way to an improved travel environment driven by a combination of less restrictive travel, Expo 2020, and improved seasonal weather. Those factors are likely to continue to support the tourism market into the 1st quarter of next year, helping place the market back onto a more normalized footing after the impact of the pandemic on this economically important sector.
The y/y metrics also continue to improve. Hotel occupancy in Dubai was 23pp higher y/y in September 2021 while RevPAR was up by 117% y/y. Dynamics in neighbouring Abu Dhabi also improved, with hotel occupancy in the capital up 7pp y/y, while RevPAR was up by close to 9.7% y/y. According to figures released by Dubai Tourism and Commerce marketing, Dubai received 3.23mn international visitors from January to August 2021. The figures also showed total hotel nights booked from January to August 2021 were up by 54% compared the same period in 2020. The supply of hotel rooms has continued to recover, with 129,389 rooms in 717 hotel establishments available in August, up 21% and 16% respectively compared to last year.
Emirates NBD Research