Overview


The GCC hospitality industry is predicted to grow at annual rate of 9.5% to AED 130bn by 2018. The Dubai hotel occupancy rate averages 80%, while Abu Dhabi is 76%, while the revenue per average room (RevPar) is around AED 732.67. (Source: STR Global, Ernst & Young)

Size and growth
In Dubai, 61% of hotels are 5-star, 30% are 4-star and just 9% 3-star or below. This picture is likely to change, as more midscale hotels are now in development than high-end ones. (Source: PWC)
The UAE will open 120 hotels and nearly 32,000 rooms between 2014 and 2018. (Source: BMI)
Major chains have announced big plans for the region as part of this. Marriot plans another 2596 rooms in Dubai, Starwood 2530 and The Address 2448. Other major hotels nearing completion now include the 667-room Millennium Bab Al Qasr hotel in Abu Dhabi, due to open later this year; the 753-room Damac Towers by Paramount (late 2016); the 863-room The Westin Dubai, part of Habtoor Palace; and the 474-room Sheraton Dubai on Sheikh Zayed Road.
Major projects in the pipeline include:
– Madinat Jumeirah’s Phase Four extension, scheduled for completion in 2016
– Mall of The World. Aims for 180m annual visitors, with 100 hotels and 20,000 rooms. Also includes 3m sq ft medical tourism district.
– Meraas Dubai Parks and Resorts. Plans an AED 10bn project that includes Motiongate, Bollywood Park and Legoland.
– Dubai Canal. When complete, will have four hotels and 450 restaurants along its 75km length.
– Bluewaters. Will feature the world’s tallest ferris wheel.
– Louvre Abu Dhabi. Part of the Saadiyat Cultural District, due to open in December of this year.

In terms of inbound markets, the Russian market is expected to decline sharply in 2015 due to the recession in their home economy. Instead, taking a greater market share should be the Asia Pacific region, with arrivals set to rise from 2.9 million in 2014 to 4 million in 2018. This reflects the growing wealth of Asia, coupled with increased business travel and significant numbers of expatriate workers coming to UAE from nations such as India and Pakistan. China also is expected to prove an increasingly important source market for inbound tourism. (Source: BMI)
Medical tourism is likely to be a major growth area. An estimated 500,000 medical tourists a year are predicted to come to the UAE by 2020, with a year-on-year growth of 10–15%. (Source: Colliers)
The sector is also creating jobs. Online recruitment activity in the hospitality and tourism sector rose 34 %year on year in the UAE, faster than any other sector. (Source: Monster Recruitment). The number of hospitality job vacancies in the region increased to 61,000 in 2013, up from 18,000 in 2009 (Source: Catererglobal.com). The sector is estimated to already employ 291,500 people.

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