Dubai hospitality industry outlook bullish for 2023: KPMG

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Dubai’s hospitality industry has made a strong post-pandemic rebound, with leisure and business trips, including MICE (Meetings, Incentives, Conferences and Events) on an upward growth trajectory in 2022, a report said.

The latest KPMG Dubai Hospitality report revealed that Dubai registered the highest hotel occupancy rate in 15 years by the end of Expo, with the Emirate’s tourism sector contributing $29.4 billion to the economy in 2022.

The Government’s robust Covid-19 response plan and the hospitality industry’s commitment to complying with government health and safety requirements elevated the UAE’s position as one of the safest countries in the world, with 90% of surveyed respondents expressing confidence in the implementation of sensitization policies across hotels in Dubai.

This enhanced guest sentiment is reflected in hotel occupancies, with 92% of consumers keen to stay in a hotel in Dubai in 2022, representing a 37% increase from the previous year’s results.

Sidharth Mehta, Partner and Head of Real Estate, KPMG Lower Gulf, said: “The Dubai’s hospitality industry has witnessed remarkable growth in 2022 – driven by the Government’s forward-thinking vision to address the needs of all hospitality stakeholders. Furthermore, the UAE is investing around $32 billion to acquire 48,000 more hotel rooms to bring it to a total of 200,000. These developments place the UAE in an enviable position to navigate travel and hospitality demands in 2023, equally driving economic growth by creating employment opportunities.”

The UAE also had the highest occupancy rate among GCC countries in 2022. For the year-to-date November 2022, Dubai's occupancy rate increased from 64.7% to 72.5%. Meanwhile ADR (average daily rate) grew significantly from AED550.87 ($150) to AED674.25, i.e. by 22%. RevPAR (revenue per available room) increased from AED356.42 to AED488.79, from YTD November 2021 to 2022.

Among the other notable trends in 2022 were digitalization and sustainability, with operators indicating that they were priority areas for them. Many are also moving progressively away from plastic bottles, reducing carbon emissions, and promoting inclusion and diversity.

Meanwhile, contactless check-in, with customers receiving their keys in their mobile phones, and other emerging technologies are set to dominate the hospitality industry in 2023.