Dubai welcomed 3.1 million tourists in the first two months of 2023

Dubai: Fueled by a steady influx of tourists from three top source markets, namely, India, Russia, and Oman, the UAE’s hospitality sector witnessed a strong growth trajectory in the first quarter of 2023, according to the latest JLL UAE Real Estate Market Overview Report.

Dubai welcomed 3.1 million tourists in the first two months of 2023, representing a 42 per cent increase as compared to the same period last year.

The rise in inbound tourism also benefited the lower and mid-tier hospitality segments, which saw gains between 7-8 basis points (bps) in occupancy and RevPAR (revenue per available room) of 15 per cent for the first two months of the year. Moreover, Dubai and Abu Dhabi hosting events such as Gulf Food and IDEX further aided operators in delivering a formidable performance.

Dubai welcomed over 1.47 million tourists in January, setting a positive pace of growth for the hospitality industry in 2023, revealed in the latest JLL UAE Real Estate Market Overview Report.

Faraz Ahmed, Associate, Research at JLL Mena, said: “While all sectors continued to build on the performance of 2022, the year’s well-planned calendar of events coupled with the continuous increase in tourist numbers, have firmly placed the hospitality sector on a growth track, reaffirming its position as one of the strongest pillars supporting the UAE’s economic acceleration. However, macroeconomic volatilities continue to influence global travel trends, making it critical for operators to employ effective revenue management strategies to boost topline revenues, particularly those in the luxury segment.” Dubai’s hotel stock climbed to 150,000 keys with the delivery of around 2,000 keys. Moreover, propelled by increased demand, around 8,000 keys are expected to be delivered in the year.

In comparison, Abu Dhabi’s hotel supply completions were limited, with around 200 keys added to the existing inventory, bringing the total stock to 32,500 keys. The capital’s future supply pipeline for the year remains modest at around 200 keys.

Within the retail sector, around 34,000 sq. m. of space was added in Dubai in the form of community retail developments, raising the total stock to around 4.7 million sq. m. in the first quarter.

Over the same period, Abu Dhabi saw the delivery of a super regional and community retail development totaling 212,000 sq.m. of retail GLA (Gross Leasable Area) which subsequently pushed the capital’s total stock to 3.11 million sq.m. In the forthcoming months, around 213,000 sq.m. of retail space is scheduled to be delivered in both emirates combined, of which, approximately 194,000 sq. m. is projected for Dubai and 19,000 sq.m. for the capital.