Finally, Dubai Hotel Sector Sets Its Track Towards Growth

According to a list known as ?Winning in Growth Cities 2012-2013?recently published by an international panel of experts, Dubai is in the top 5 most profitable hotel investment destinations in the world. Dubai has successfully managed to gain 16^th position in the list of top 25 best hotel destinations in the world. Gone are the days when Dubai hotel sector was struggling to maintain occupancy levels. This is no secret that now the sector has set its track towards growth.

Performance in 2012

During so far in 2012, Dubai has successfully managed to record high occupancy levels of 80% which is 8.4% higher than the same period last year. In the month of April alone, Dubai recorded the highest RevPAR (revenue per available room) level in 3 years. The investment in the hotel sector between Q3 2011 and Q2 2012 remained Dh14.2 which is higher than the value of investment recorded during 2009 and 2010. These stats are a clear indicator of the fact that not only Dubai hotel sector is prospering but it is also playing a key role in the recovery of the UAE Property.

Reasons of Robust Growth

1. The major reason behind this robust growth is the main focus of the government to promote Dubai tourism and earn a major portion of its GDP from its revenue. Emirate sees demand from all types of travelers whether leisure or corporate with leisure segment clearly outperforming business segment.
2. Due to overall improvement in business sentiment in Dubai, demand from business travelers is also increasing. The major international events hosted by Dubai such as Arab Health, Dubai Air show and World Economic Forum had also helped it to lure over 80,000 travelers in just 2 or 3 years.
3. Another reason behind the recovery of property in Dubai and increased confidence in Dubai hotel sector is the construction delays followed by a credit crisis which have slowed down supply of Dubai properties. Since hotel sector has kick-start to recovery, now many developers are planning to resume construction of various stalled projects.

Future Outlook

The outclass performance of Dubai hotel sector has spread a general wave of optimism and experts are predicting better times ahead for the sector in 2013. Though new supply of hotel rooms is expected to increase by 9.6% this year yet the demand is also expected to increase by 16.5% compared to the year before. Revenue from hotels has been predicted to grow from 8% last year to 9% this year. Moreover, international visitors in Dubai are expected to spend around 24% more this year due to increase in lure of Dubai as a leading tourist destination in the world.

The general sentiment of the market indicates the recovery of the hotel sector in Dubai is gathering pace and with this growth this sector can do wonders in uplifting the demand of Dubai real estate.

Source: http://www.reiclub.com/realestateblog/finally-dubai-hotel-sector-sets-its-track-towards-growth/

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