- Country's hospitality investment outlook shows $301.7 billion worth of hotel and residential projects are currently under development, Knight Frank says
UAE hoteliers upbeat on strong fourth quarter as Cop28 and New Year’s Eve drive bookings
Hoteliers in the UAE expect a strong performance in the fourth quarter, with the Cop28 climate summit and New Year’s Eve festivities driving even more bookings during the country’s traditionally busy winter period.
UAE hotels are expecting occupancy rates to range between 80 per cent to 90 per cent during the three-month period as business conferences, leisure events and cooler weather lure international travellers, executives said on the sidelines of the Future Hospitality Summit in Abu Dhabi.
InterContinental Hotels Group, which operates the Crowne Plaza and Holiday Inn brands among others, is forecasting a 20 per cent increase in revenue per available room – or RevPar – for its UAE hotels during the fourth quarter compared to the same period in 2019, Haitham Mattar, IHG’s managing director for Middle East, Africa and South-West Asia, told The National.
The UK-based global hospitality company is also forecasting RevPar growth of 10 per cent compared to the same quarter of 2022, mainly driven by Cop28.
“The last quarter of the year is normally the highest in demand with business meetings, holidays and tourism … this is when we have the highest demand from the European and Indian markets into the UAE,” Mr Mattar said.
“We’re seeing huge demand with businesses on our books and the pace of bookings is becoming extremely healthy. We’re well ahead of 2019 levels in terms of trading and well ahead of 2022 year to date.”
Sandeep Walia, chief operating officer for Marriott International in the Middle East, said the fourth quarter is “looking very good” on the back of consecutive global business events such as the Dubai Airshow and Cop28 in November.
“We’ve started with a lot of inquiries and we’re holding bookings but between now and the journey to confirmations – there are a lot of steps,” he said.
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“Overall, [the fourth quarter] is normally one of the busiest quarters for us in the UAE and in Dubai. There’s a lot of growth in the Abu Dhabi market as well with a number of events and activities.”
The current trend of average daily rate growth outpacing the rise in occupancy levels is expected to continue in the fourth quarter, he said.
Siegfried Nierhaus, vice president for the Middle East at Deutsche Hospitality, said the company’s UAE hotels are expecting occupancy rates of about 85 per cent to 90 per cent during the fourth quarter.
“From an overall UAE perspective, we see a very healthy quarter for 2023,” he said.
“This global event [Cop28] will bring even more limelight to the UAE and Dubai as destinations.”
Hospitality projects in the pipeline
The UAE’s hospitality investment outlook shows $301.7 billion worth of hotel and residential projects under development, according to research by global consultancy Knight Frank.
Hospitality and residential projects worth $1.9 trillion are under development in the wider Middle East, with Saudi Arabia, UAE and Egypt accounting for 90 per cent of the total investment.
A significant volume of hospitality-related transactions is currently at an advanced stage of negotiation, with high-profile properties expected to change hands in the coming months, according to global real estate consultancy Colliers.
“There’s a strong appetite for the hospitality asset class – particularly in Dubai and Ras Al Khaimah – from regional and international investors, buoyed by strong operating performance last year and the continued enhancement of the UAE as a top-tier international tourism destination,” said James Wrenn, executive director and head of capital markets for Middle East and North Africa at Colliers.
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UAE mid-market brand Rove Hotels is expanding its footprint across the Middle East with plans to grow to 10,000 rooms in operation or under development over the next five years, up from 3,400 operational hotel rooms currently, it said in a statement during the summit.
The company, a joint venture between Meraas and Emaar Properties, is also looking for more opportunities in the residential property market, after its first branded residence projects – Rove Home Aljada and Rove Home in Downtown Dubai – sold out.
Hilton also said it plans to increase its presence in the Middle East by more than 125 per cent in the coming years.
Its hotel openings expected in the next few months include Waldorf Astoria Doha West Bay, Conrad Bahrain Financial Harbour, Hilton Riyadh Olaya, Hilton Cairo Nile Maadi, Embassy Suites by Hilton Dubai Business Bay and Hampton by Hilton Kuwait Salmiya.
As part of its growth strategy, close to 100 hotels – totalling almost 25,000 rooms – are set to open in the Middle East in the near future, it said. Hilton is also managing an active pipeline, with about 70 per cent of its Middle East projects currently under construction.
