Dubai’s hotel room inventory is expected to hit 76,500 by the end of the year, up 14 per cent from 2015, with 9,300 keys across 31 new hotels estimated to be in the pipeline, a new report has revealed.

According to a market report released by Deloitte, the tourism industry is fundamental to Dubai’s economy, with the emirate having the highest overnight visitor arrival expenditure globally, at approximately Dh17,146 ($4,66.8) per city resident.

Total visitors to Dubai in 2015 was 14.2 million, representing 7.8 per cent year-on-year growth. Saudi Arabia drove the largest number of visits to Dubai in 2015 with 1.6 million, followed by India with 0.95 million and the UK with 0.9 million. Iran and China drove the greatest increase in visitor numbers, whilst visitors from Russia declined by more than 15 per cent due to economic and political turbulence and a weakened ruble.

However, Dubai still remains one of the best performing hospitality market globally with regard to occupancy levels, positioned together with New York at 84 per cent, London at 82 per cent, Paris at 78 per cent and Berlin at 77 per cent.

In the short term (2016 to 2017) the delta between hospitality supply and demand will widen leading to a ‘new normal’ in hotel performance in
Dubai.

Given the market fundamentals, occupancy levels at around 70 per cent to 75 per cent are likely to represent the “new normal” in Dubai in 2016.

Furthermore, serviced apartments are likely to attract greater attention in 2016, driven by key source market trends, growing visitor demand for longer average lengths of stay and better value accommodation.

In the medium term, the report predicts that demand growth in Dubai's hospitably market will catch up with supply growth, as the market gains traction in the run up to Expo 2020. It considers that planned tourism
infrastructure investment (including a number of major theme parks), Expo 2020 and the prospect of a GCC Schengen-style visa will all have a positive impact on demand in Dubai, driving up visitor numbers and average length of stay.

Looking at the longer term, the report estimates that there are some 23,000 hotel rooms in Dubai's pipeline between 2016 and 2020 and while market fundamentals are strong, investors, developers and lenders should also consider the Expo 2020 and devise strategies for sustaining demand levels beyond 2020, the report indicated. - TradeArabia News Service