With Abu Dhabi expected to surpass its target of attracting 3.1 million hotel guests in 2014, Dubai is continuing to prove itself as a popular destination for tourists across the world, snatching the title of world's number one destination for hotels.
According to TripAdvisor, the emirate is also the world's number one destination for retail. Both titles are among Dubai's biggest milestones this year, said Dubai Corporation for Tourism and Commerce Marketing (DCTCM).
The tourism body added that Dubai jumped from its position as eighth most visited city in the world by international visitors in 2012, to fifth place in 2014, according to statistics by MasterCard.
"2014 was a good year for the Dubai tourism sector, and builds up on 2013, albeit with an improved competitiveness. Dubai tourism benefits however from a strong diversification across feeder markets as well as across business segments [travel purposes],” said Chiheb Bin Mahmoud, executive vice-president and head of hotels and hospitality at Jones Lang LaSelle real estate consultancy.
Meanwhile in Abu Dhabi, 2.8 million guests checked into the emirate's hotels and hotel apartments during the first 10 months of this year, according to the Tourism and Culture Authority's latest statistics.
The figure sets the emirate well on the path to achieve, if not surpass, its 2014 target of attracting 3.1 million guests. The installation of the Louvre Abu Dhabi's dome brings the emirate one step closer to achieving its target status as a cultural hub.
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Headwinds
But despite targets to attract 3.5 million hotel guests to Abu Dhabi in 2015, and a vision to bring in 20 million tourists per year to Dubai by 2020, the UAE's tourism industry is expected to face some challenges next year, analysts said.
The influx of new hotels across the UAE is expected to increase competition, and reduce occupancy rates.
The improvement in the security situation in popular Middle Eastern destinations such as Egypt, Lebanon, and Turkey, might also impact the UAE to some extent as regional tourists turn to them instead of the UAE.
"The key challenge for Abu Dhabi hotels in 2015 will be to maintain the current growth in demand [and] occupancy, and achieve a consistent growth in room rates in the face of issues.
[These include] the expected growth in supply [roughly 2,000 keys in the pipeline for 2015], the effect of recovery in the competitive destinations, the potential effects of low oil prices, and the impact of the ongoing economic and political crisis in Russia on tourism arrivals to the country,” said Rashid Aboobacker, senior consultant at TRI Hospitality Consulting.
In an emailed statement to Gulf News, Aboobacker said he did not expect falling oil prices to have a major impact on tourism in Abu Dhabi.
In Dubai, hotels continue to face challenges with their occupancy rates.
"In the first 11 months of the year, average occupancy for four- and five-star hotels in Dubai reached 79.8 per cent, slightly down from the 80.2 per cent recorded during the same period in 2013,” Aboobacker said.
He added that occupancy in 2015 is likely to remain in the 75-80 per cent range — marginally down from the 80-plus per cent levels in recent years.
As for hotel chains, some were optimistic about the outlook for next year, while others questioned the impact of increasing supply, and oil prices.
"Even if the number of visitors increases, hoteliers will not realise any growth due to additional hotels to the current inventory. The number of new hotels coming online does not match the current number of visitors, and we are certainly reaching and feeling an oversupply of hotel rooms,” said Khaled Sharabassy, general manager at Tilal Liwa Hotel.
Likewise, Moussa Al Hayek, chief operating officer at Al Bustan Centre and Residences, told Gulf News he did not have a very bright forecast for the coming year due to rock-bottom oil prices, and weak currencies. Both factors might result in budget restraints in many countries, and thus, lead to a drop in international travel.
Al Hayek expected the overall economic outlook to take a hit on occupancy and average room rates as many hotels may reduce their rates to attract guests.
Bullish outlook
Other hotel operators were more bullish, saying that the GCC has seen economic recovery that will not be affected by global turmoil.
"Continued [average daily rate] growth in 2014 pushed the metric above 2008 levels, and further rate growth helped us to drive positive [revenue per available room] (RevPAR) performance throughout 2014.
We are very optimistic for 2015, and anticipate growth in metrics for all cities in the region and the top RevPAR growth stories will be in the GCC cities, especially in the UAE, where we are forecasting an average occupancy growth of 2.5 per cent,” said Vicky Varfis, Corporate Vice President of Sales at Rotana Hotels.
Strategy
In order to attract more guests, DCTCM, Dubai's tourism body, will focus on hosting more events and festivals. It will also focus on attracting more transit passengers at Dubai's airports into spending time in the city.
"Dubai's hotel and hotel apartment portfolio has grown from 609 establishments in September 2013 to 634 encompassing 88,888 rooms in September 2014. However, we know that given current demand and our ambitious future targets, there is also a need to increase three- and four-star hotel stock. In doing so, we increase the breadth of our appeal and cater to travellers whatever their budget is,” Issam Kazim, chief executive officer at DCTCM told Gulf News.
Source: Gulf News