Since 1851, World Expos have showcased some of the world’s greatest innovations in some of the world’s most influential cities.
NB: This is an article from STR
Currently, Dubai has the honor of welcoming the world as the COVID-19 pandemic forced the event to be postponed from its originally scheduled 2020 start. While Dubai was already recovering better than most major, global markets, the start to the six-month “mega event” in October was a welcome sight for hotels with delegates, business travellers and leisure guests accounting for more than 1 million visits during the event’s opening weeks (according to event organizers).
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In this latest piece, STR analyzes the impact this major exposition has already had on Dubai hotels occupancy, average daily rate (ADR) and revenue per available room (RevPAR). We also look back with a comparison to previous Expo host, Milan, and look forward at occupancy on the books for the remainder of the event in Dubai.
Best levels in three years
As to be expected with the boost in hotel demand, Dubai’s ADR and RevPAR during the early Expo months have been significantly higher than comparable periods in previous years. Add in the recent Cricket World Cup to the equation, and Dubai’s ADR has reached as high as AED981 on 29 October, which was a level most comparable with a typical New Year’s Eve in the market. Overall, that ADR was the highest in the market since 1 January 2021 and contributed to October 2021 being Dubai’s best ADR and RevPAR month in three years. Occupancy, which peaked at 90% on 21 October, hasn’t been too far behind as October was the market’s best occupancy month since January 2020 and just 3% below the pre-pandemic comparable from October 2019.Image
How much business is left to capture?
When looking at data from Forward STAR, Dubai hotels are set to see continued success in the final months of 2021 with occupancy on the books eventually spiking on 31 December thanks to New Year’s Eve festivities. In 2022, levels are sitting consistently around 20%, which offers a solid base for which to grow upon
As is common for many markets right now, booking windows, the gap between making a booking and arrival, remain short. Dubai’s hotel pickup, the difference in bookings from one Forward STAR reporting period to the next, hits a high of 18% in November. It can therefore be expected that as we move closer to the end of the year and into 2022, occupancy levels shall continue to rise.Image
Milan comparisons
Dubai’s ability to run the event in 2021 after its initial postponement has been lauded by the hospitality industry’s stakeholders, especially considering the challenges remaining around international travel restrictions, quarantines and testing requirements. To get a sense of the event’s current success, we compare Dubai’s early occupancy performance to that of previous Expo host, Milan, in 2015. The global capital of fashion and design comfortably eclipsed 80% hotel occupancy in 2015, however, it should also be noted that levels fluctuated dramatically throughout the event period, and the city’s strongest performance came near the end of Expo. Considering Dubai’s already fast start, a late-event spike in performance would push to levels to new heights.Image
Conclusion
Despite the many logistical challenges faced, Dubai has managed to successfully kickstart this world-renowned exposition, and the local hotel industry is thriving as a result. The added benefit of hosting the Cricket World Cup has also helped to bolster hotelier pricing confidence and ability to drive RevPAR through room rates. While forward-looking data shows Dubai behind Milan’s pace in occupancy, there is plenty of time and indications for greater pickup over the coming months.
