Dubai's hotel occupancy rates remained high in H1 2017

The supply of hotel rooms in Dubai increased by 5.7 percent year on year in June 2017 to 94,705 rooms.

Dubai’s hotel occupancy rates remained high averaging 78.0% in H1 2017 up from 76.3% in the same period a year ago. According to the latest data from STR Global, the supply of hotel rooms in Dubai increased by 6.0% y/y in H1 2017. With the supply of hotels rooms still outpacing demand growth, occupancy rates are likely to remain stable or ease slightly with demand gradually catching up in the run-up to the 2020 Expo.
The supply of hotel rooms in Dubai increased by 5.7% y/y in June 2017 to 94,705 rooms. The Department of Tourism and Commerce Marketing (DTCM) is targeting 140,000 to 160,000 hotel rooms by the end of the decade. Data from STR Global also shows that a further 19,891 hotel rooms are currently under construction in Dubai, of which 7,554 are due to come online by year end. Another 23,582 hotel rooms are in planning stages.
Hotels have discounted room rates through most of 2016 in order to keep occupancy levels high, although the STR data also shows some improvement in pricing power since Q4 2016. In the first half of 2017 RevPAR decreased by -0.9% y/y compared with -14.0% the same period last year. Substantial additional supply is likely to cap RevPAR growth in the coming months however.