Domestic Travellers Buoy Dubai Tourism in Pandemic Year, KPMG’s Dubai Hospitality Report Reveals

• Nearly nine in ten (87%) guests who stayed at a Dubai-based property during the pandemic were satisfied with their experience; 85% would return.
• Half of owner/operators expect occupancy rates above 60% in FY 2021 and 75% expect occupancy to return to pre-Covid-19 levels by 2023.
• 75% of owner/operators anticipate the vaccine to be highly effective in boosting occupancy rates.

An overwhelming majority (87%) of consumers in the UAE are satisfied with their stay in Dubai hotels since the beginning of the pandemic, and eight in ten consumers are confident hotels apply the required level of sanitization, according to KPMG’s report on Dubai’s hospitality industry. Despite strong outbound travel restrictions among many of the UAE’s main source markets, Suite success: Dubai hospitality survey 2021 fuels hopes of recovery for the emirate’s hospitality sector. More than half (55%) of consumers surveyed were willing to stay at a hotel in Dubai, notwithstanding Covid-19, with 85% willing to return.

Sidharth Mehta, Partner, Head of Real Estate, KPMG Lower Gulf, said: “Dubai’s popularity as a staycation destination has been key in supporting the emirate’s hospitality sector. Though short- to medium-term challenges remain, Dubai’s successful management of the pandemic and the efforts put in by individual players have helped recovery. New developments, such as Ain Dubai and the Museum of the Future, successful mass immunization, and safety protocols followed by properties will increase Dubai’s appeal as a safe destination.”

Despite the odds, the UAE recorded the second-highest occupancy rates globally (54%), behind China, in 2020. Dubai’s occupancy rates steadily improved since April 2020, touching a 12-month high of 69% last December, dipping to 59.4% this April. While international arrivals plummeted, the number of room nights sold to domestic tourists increased by 107%, surging from 2.74 million in 2019 to 5.68 million in 2020.

Revenue per available room (RevPAR) in Dubai grew by more than 550% during 2020. After hitting a low of USD 17.2 (AED 63.18) at the start of the pandemic, RevPAR reached a peak of USD 114.7 (AED 421.32) in December 2020, coinciding with the holiday period. As of April 2021, RevPAR stood at USD 92.9 (AED 341.22).

The Dubai Assured stamp launched in June 2020, with the goal of assuring visitors that hotels, restaurants, retail outlets and attractions are in line with international health and safety standards and protocols, also served to build guest confidence. More than three-quarters (77%) of those planning to stay in a Dubai hotel would consider whether a property received a Dubai Assured stamp, certifying its sanitization protocols.

According to the KPMG report, 75% of owner/operators surveyed anticipate the vaccine to be highly effective in boosting occupancy rates. In fact, half of those surveyed expect occupancy rates above 60% in FY 2021 and 75% expect occupancy to return to pre-Covid-19 levels by 2023. While leisure travel in the region may bounce back, the shift to remote working may change business travel in the long term. Sixty-seven percent of owner/operators expect the meetings, incentives, conferences and exhibitions (MICE) segment to be at significant risk. However, as many as nine in ten (92%) travellers to Dubai saw the emirate as the safest place in the world to conduct business meetings during the pandemic.

Dubai will likely remain a regional and global tourism hub. Leisure and business destinations around the world will only see travel increase, as vaccine rollouts continue and economies gradually recover.