A new report by Knight Frank highlights the positive medium-to-long run outlook for the UAE, noting the importance of mid-market and budget hotel offerings in widening the tourist base.
Research conducted by UK-based Knight Frank indicates a positive outlook for the hospitality sector in Dubai and Abu Dhabi, driven by opening of theme parks and new tourist attractions in the country.
Noted in its UAE Real Estate 2016 mid-year market review, Knight Frank said: “The medium-to-long run our outlook for the hospitality sector remains positive for both cities, and will be rooted in the delivery of major demand generators that will help drive tourism demand – particularly from the leisure segment.”
The research also claimed that from a supply side, despite notable recent openings, the two cities remain underserved in terms of mid-market and budget hotel offerings.
“The expected delivery of the theme park complex, Bluewaters Island, the Opera District and major retail destinations in Dubai, along with Abu Dhabi’s commitment to developing entertainment and cultural districts of its own, will stimulate visitation and maintain the competitive positioning of both cities. These demand drivers are underscored by the continued investment in airline infrastructure, which will further increase the accessibility of both emirates.”
| Advertisement |
Dubai is set to welcome four theme parks and Dubai Opera before the year-end, and phase one of the Warner Bros. World Abu Dhabi theme park will open in 2018.
“The introduction of more affordable hospitality options will ultimately balance the hotel supply, which is heavily weighted towards the top end of the market in both emirates, and will widen the country’s tourist base,” the report said.
The report also states, on a less optimistic note, that challenges seen in 2015 such as a strong US dollar, lower visitor numbers from Russia & CIS countries, slower economic growth in China and the Eurozone are expected to continue throughout 2016, and are expected to have short-term impacts on demand and profitability.
According to Knight Frank, Dubai’s hotel market sustained strong occupancy rates in the first quarter 2016, registering 85%, down from the rate recorded over the same period in 2015.
Search our database of more than 2,700 industry companies
