Investment and advisory firm JLL released its first quarter Dubai Real estate Market Overview report yesterday, assessing trends in the hotel sector, as well as office, residential and retail sectors.
The report shows that the decline in tourists from Russia and the Eurozone has been offset by the significant increase in tourist numbers from emerging markets with South Asia, Far East Asia and Africa increasing by 14%, 13% and 11%, respectively
However, it also revealed that while occupancy rates across the Middle East hotel sector dipped marginally by 2% year on year, average daily rates saw a 9% decrease to US $272 in the first two months of 2015.
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Chiheb Ben Mahmoud, head of hospitality at JLL MENA commented: “The hotel sector continued to face competition in the first quarter of the year.
“The increase in supply on one hand and the perceived softness of the inbound travel market on the other are leading some hotels to review their pricing and revenue management strategies.
“While occupancy rates remain healthy at 86% and above the MENA average, RevPARs declined 11% to US $234 over Q1 2014.
“Visitor trends in the tourism market are changing with the stronger U.S. dollar, which is a detractor for Russian and Eurozone tourists, and evolving consumer habits in emerging markets, which is resulting in higher guest numbers from South Asia, Far East Asia and Africa.”
JLL anticipates that ADR may soften further in response to the additional 3,600 keys scheduled for delivery over the next nine months across the region.
While Dubai’s hotel market welcomed 11.6 million guests in 2014, according to figures released by the Dubai Department of Tourism & Commerce Marketing (DTCM), the rate of growth declined from the 11% registered in 2013.
JLL is a financial and professional services firm specialising in commercial real estate services and investment management.
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