|Source: Jones Lang LaSalle Hotels
The Dubai economy is expected to grow by between 4% and 5% in 2012 and the hotel-sector recovery witnessed during 2011 has continued into the first half of 2012, according to a Q2 Dubai Real Estate Market Overview from Jones Lang LaSalle.
Signs of improved investor confidence have flowed into Dubai’s real-estate sector, with continued demand for quality, well-located, income-producing assets. Hotel occupancy levels improved to 83% from 79% in the same period last year. The growth has been mainly supported by a strong tourism sector and a very encouraging number of visitors. The recovery of Dubai hotels has been reflected by an increase in both average daily rate revenue per available room.
The second quarter of 2012 saw the opening of one major internationally branded hotel – Melia in Bur Dubai, which marked the entrance of a new operator in the Dubai hospitality market.
•The first half of 2012 has witnessed an addition of about 850 branded hotel rooms in the city. The bulk of the major openings are scheduled in the second half of the year, mostly leaning towards the end of the year after Ramadan.
•Approximately 4,500 additional guest rooms are expected to be completed in 2012 with major projects including JW Marriott Marquis (Business Bay), Al Khor Rayhaan (Al Ghurair City), Fairmont The Palm and Conrad Sheikh Zayed Road.
•The positive upswing in tourism volumes in Dubai has raised confidence levels and following a slowdown witnessed in the last couple of years, there has been an increase in the number of announced projects in the city including the Four Seasons Dubai, three hotels (St. Regis, Westin and W) at the Metropolitan site and some midscale properties in the Bur Dubai / Deira area.
•Additionally, several major established hotels are undertaking renovation programs to refresh their products in order to match the new supply and cater to increased demand (e.g. Pullman Deira City Centre Hotel).
•The first five months of 2012 have upheld the recovery trend in the Dubai market. The city received around 2.6 million tourists in the first quarter of 2012.
•Occupancy rates as at YT May 2012 have increased by 4% points over the same period in 2011, reaching 83% on city-wide basis.
•After a period of two years, average rates showed an increase of about 7% during the first five months of 2012 as compared to the same period in 2011. The beach hotels have witnessed an improvement exceeding 10% in ADR levels in January – May 2012.
•As a result of higher occupancies and ADRs, RevPAR levels showed an impressive 13% growth, reaching USD 212 in YT May 2012 over the same period in 2011.