Dubai hotels to see 'new norm' of 70-75% occupancy

Rising competition among Dubai's hotel operators will bring a 'new norm' for occupancy rates in the city of between 70-75% in 2016, according to a new report.

Deloitte's annual Real Estate Predictions Report for Dubai said occupancy levels are set to drop from the 77.5% witnessed last year as new hospitality projects continue to enter the market.

The report also predicted that as operators compete for occupancy, it is expected that average daily rates (ADR) will soften further during 2016, which should encourage growth in visitor volumes required to support the investment in tourism infrastructure.

Deloitte added that serviced apartments are likely to be an area of focus in 2016, driven by key source market trends, growing visitor demand for longer average lengths of stay and better value accommodation.

In terms of F&B, Deloitte believes 2016 will be a strong year for the retail segment of this industry, driven by greater brand penetration and expansion.