Dubai hospitality sector shows healthy signs of recovery
Source: BI-ME , Author: Posted by BI-ME staff
Posted: Mon July 11, 2011 1:25 pm

UAE. Cluttons, the real estate specialist that has enjoyed a dedicated Middle Eastern presence since 1976, today announces its market report for Dubai’s Hospitality sector in Q2 2011.

According to the report, Dubai’s hotel sector has benefited from the Emirate’s political stability within the Middle East region, with strong performance in occupancy levels and length of stay.

With a total of 8.3 million visitors(1) in 2010, Dubai is still proving to be a popular and an attractive destination among tourists and visitors.

Overall hotel occupancy in Q1 2011, peak-season for Dubai, averaged 86%, representing an increase of 4% year on year.

An increase in affordability as a tourist destination has clearly helped Dubai’s comeback. Despite short to medium-term recovery risks; optimistic sentiment about local market conditions continues to increase with monthly occupancy levels showing Q1 2011 nearly matching Q1 2008 figures – which was pre-economic slowdown.

The flexibility and consistent performance in Dubai’s hospitality industry and other sectors has helped to reduce economists’ fears of a double-dip recession in the UAE.

Steven Morgan, Head of Cluttons UAE comments, “Occupancy rates and lengths of stay have enjoyed considerable growth. However, to what extent Dubai’s current performance is being buoyed by the recent political uncertainty in the region is not yet known and it is unclear how long this situation will continue. In the short term, Dubai seems likely to out-perform in the tourism market this year.”

With over 52,000 hotel rooms, Dubai can confidently cater to the 8.3 million visitors that passed through in 2010, however with 10,000 rooms to be delivered in 2011, and an additional 30,000 rooms in the next three years, the major downside risk for the sector in the medium to long-term still remains to be a case of oversupply.

Notes:

(1) The latest hotel performance indicators published by Ernst & Young covering figures in Q1 2011

Cluttons LLP is an independent partnership of chartered surveyors founded in 1765. With a network of offices in the UK, Europe, Middle East and South Africa, Cluttons LLP offers a wide range of professional property management, agency and consultancy services across the commercial and residential sectors, for both investors and occupiers. For further information,

For more information, please visit www.cluttons.com.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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INTERNATIONAL. Participants in the global oil market are eagerly awaiting the Opec meeting on November 27, which could potentially set the tone and the direction of oil prices.
INTERNATIONAL. In the end, it is unlikely that the territorial Islamic State can survive. The truth is that Turkey, Iran and Saudi Arabia are all waiting for the U.S. to solve the problem with air power and a few ground forces. These actions will not destroy IS, but they will break the group's territorial coherence.
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