Comment: A Day in the sun
Dubai is back in the busy season after a huge summer slump
Dubai is a place of beginnings and endings. You meet a good friend and before you know it, they have jumped on a plane home, never to return. The skyline changes from week to week, as new buildings — many of them hotels — spring up.
Restaurants and bars too have their ups and downs, being the hippest hang-outs one week, and old news the next, as the fickle Dubai crowd moves on to something shinier. The ephemeral nature of the city extends to almost everything, including hotel performance, which swings from exhilarating highs to debilitating lows, leaving hoteliers suffering from a proverbial whiplash at this time of year.
During Ramadan, occupancy levels at hotels in the emirate fell by more than 15% according to STR Global data, and the impact of the holy month was heightened by Dubai’s supply/demand imbalance, (supply increased 4.6% while demand fell 11.6% during the period). And we are on the cusp of change again as the new season approaches; the unbearable heat would suggest otherwise, but the quiet summer period is almost over, and this spells good news for the hotel industry, with properties in the emirate looking forward to occupancy levels more than doubling from the 40.9% experienced during the first 13 days of Ramadan, to high season levels, which last year averaged out at around 85.5% (STR Global) in November. But hoteliers must live for the moment and reel in as much business as possible during peak season, as the steep drop looms again next summer.
The question on everyone’s mind, is: how can Dubai dampen these extreme fluctations? And the answer is of course, by becoming a year-round destination. How to achieve this however, is the tricky part. While the effects of the dramatic fall in oil prices — and the impact this has had on visitor numbers — will reverse in due course, the increase in inbound tourism needed to support future growth, will rely on infrastructure spend, PricewaterhouseCoopers (PwC) predicts.
And testmament to how high this is on the agenda for the authorities, Dubai Parks and Resorts — set to become the Middle East’s largest multi-themed leisure and entertainment destination when it opens in October 2016 — has announced that it has so far spent AED 3.8 billion (US $1.03 billion) on the project. In addition, a sleugh of far-fetched indoor leisure attractions have been dreamt up to try to answer the question. Mall of the World, the temperature-controlled pedestrian city — housing what developers claim will be the world’s largest mall and theme park — and the tropical ecosystem in Akoya Oxygen master development, Damac’s retail and entertainment zone set for completion in 2019, are just some of these.According to PwC, the UAE’s theme parks in the pipeline will attract 18 million visits by 2021, meaning the country could become a world-class leisure destination, to rival cities like Orlando, Singapore and Hong Kong in the near future.
An emirate not content to have its day in the sun, Dubai wants all 365, and what Dubai wants, it gets. Change is afoot, but in the mean time, hoteliers must brace for a few more highs and lows, and enjoy the ride along the way.