TRI Consulting associate director Christopher Hewett said long-term planning during short-term challenges in the market was important, and suggested that the present rate erosion will lead to a stronger sector.
Occupancy levels are to remain stable above 75% in Dubai according to Hewett, speaking on stage at the Great GM Debate 2016, although ADR will continue to soften by 7-8% through 2016 and into 2017.
RevPAR is expected to fall by 9-10%, while mid-market growth is set to put further pressure on five-star performance, he added.
“Looking at the market today, we see that it is facing some challenges, especially with regards to rate erosion, but we all need to pay attention to the positives, and the positives are that Dubai is still attracting very strong levels of demand and hotels are posting 80% occupancy. This is something that we must focus on,” said Hewett speaking to Hotelier Middle East.
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He continued: “That being said, with this rate erosion, it is going to force hoteliers to start looking internally for solutions, creating more efficiencies within their operations, which is going to be for the betterment of the industry on a long-term basis.”
New and upcoming leisure attractions are set to drive visitor growth, and a shift in Dubai’s status from a luxury destination to a more affordable mass tourism market is anticipated, according to Hewett.
Between August 2015 and July 2016, rooms occupancy (%) was 79.3%, representing a -0.9% change.
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