Dubai hotels: Occupancy and room rates build up to one busy December and New Year

Dubai: Try booking a hotel room in Dubai for December and you could be in for a disappointment. From prime beachfront resorts to city-based three-star properties, just about every room is taken – in advance. And the rates are matching up to that demand.

“The five-star properties will always do well at this time of the year in Dubai, but what’s remarkable is the kind of advance bookings four- and three-star properties are getting,” said Praveen Shetty, Chairman of Fortune Group. “The city is seeing the return of business travel – and that explains why four- and three-stars are seeing this level of demand. The Expo has played its part, and hotels close to the venue are the biggest gainers.”

Peak season

Current average room rates at a four-star en-route to the Expo venue is at Dh400-Dh450 range for a four-star, and looks good to push past the Dh500 mark around New Year. A five-star stay in comparison would be well upwards of Dh1,500-Dh2,000 closer to the eve of 2022. A four-star room in the heart of the city would be in the Dh300-Dh400 range – they were going at Dh150 and under last year.

Hotel industry sources are taking stock of the latest COVID-19 related updates, and confirm that December/early January bookings remain well on track. “The biggest plus remains the UAE’s track record on vaccinations and controlling Covid,” said Shetty. “As every other sector, this has been the main reason why the hotel sector’s fortunes recovered so fast. Just last year, there were hotel rooms available in the city for Dh100 a night, even Dh50.”

The Fortune Group operates six four-star hotels in the city, with a combined 600 plus rooms. Occupancy levels are past the 90 per cent mark – and Shetty believes an average 70 per cent occupancy will continue well into the first three months of 2022. “There are a couple of major exhibitions in the healthcare (Arab Health) and F&B (Gulfood Show) in January and February,” he said. “Hotels are already getting some advance bookings for those.”

One of Dubai’s prominent hospitality landmarks, the Fairmont on Shaikh Zayed Road, will soon start on its phase 2 and 3 refurbishment. The property is currently in the midst of the phase 1 works to refurbish all the 275 rooms.

Phase II includes the redesign of all public areas, including the main lobby, the lobby extension and café plus the valet parking entrance. Phase III will see the redesign of the Fairmont’s all-day dining facility. All of these works will be handled by SAY Studio.

“We are very excited that Fairmont Dubai is to undergo such a significant transformation,” said Kosta Kourotsidis, General Manager at Fairmont. "I can assure that a brand-new Fairmont Dubai experience is coming, that will be well worth the wait.”

October shows the way

The Expo has done its part quite well - in October, which was the opening month for the global event, UAE hotels’ average occupancy rate was at 78.8 per cent. That figure stacks up well against not just the comparable 2019 figure, but was the best showing for October since 2015. Dubai hotels’ occupancy on their own nudged into the plus 80 per cent range last month, according to figures released by the consultancy CBRE.

“With growing international visitation, an increasing number global locations re-entering lockdowns and a number of planned events at Expo 2020, we envisage both international and domestic leisure tourism, combined with returning corporate tourism, will continue to underpin strong performance levels across the UAE,” said Taimur Khan, Head of Research – MENA at CBRE,

What’s remarkable is the kind of advance bookings four- and three-star properties in Dubai are getting

- Praveen Shetty of Fortune Group

Sustain the run

Shetty can vouch for the business/corporate travel part of it. “That’s what our bookings show, and the next round of exhibitions will keep that demand going,” he added. “After a tough year, the hotel industry – whether it’s five-star or four-, luxury or midmarket hotel – needed a strong year. We are seeing that.”

More hotels lining up

New hotels are being added to Dubai’s hospitality mix, with Dubai Government owned wasl Properties confirming the launch of Aloft Dubai Airport (230 rooms) and Element Dubai Airport (89 rooms in a ‘nature-influenced environment’).

Other hotels and hospitality clusters will be created in Dubai going forward, not least at District 2020, which is what the repurposed Expo venue site will become after March 31, 2022, when the event draws to a close.

For the hospitality industry, it is another chance to keep the momentum going.

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