Dubai may exceed pre-pandemic international tourist numbers in 2023

Dubai could exceed the pre-pandemic annual number of international visitors this year following a growing influx of tourists, according to a new report.

The emirate hosted 3.1 million visitors in the first two months of 2023, according to the latest data from Dubai’s Department of Economy and Tourism.

In January, the number of visitors increased by 50 per cent year-on-year and stood 9 per cent below pre-pandemic levels of 2019, according to an assessment by Emirates NBD.

However, in February Dubai’s tourism exceeded pre-pandemic levels with 1.63 million visitors, up 7 per cent from 2019 and 35 per cent year-on-year.

“The strong start for the year shows promising signs that Dubai’s tourism may exceed the record number of visitors of 16.7 million in 2019,” Emirates NBD said in a report on Monday.

The tourism sector, an important pillar of the emirate's economy, has strongly rebounded from the coronavirus-induced slowdown.

Dubai recorded 14.36 million international visitors in 2022, inching closer to the 16.73 million tourists in 2019, according to DET statistics.

Dubai also came second behind Paris in a report by Euromonitor that revealed the top 100 city destinations last year.

Business activity in Dubai's non-oil private sector economy hit a five-month high last month as output expanded on stronger increases in both jobs and inventories, with growth rates reaching multiyear records.

Dubai International Airport remained the world's busiest international hub for passengers last year for the ninth year in a row, as long-haul travel demand surged, rankings by the Airports Council International showed this month.

In March, the airport handled 16,713 flights, marking an annual increase of 23.7 per cent and surpassing pre-pandemic levels for the same period, Sheikh Ahmed bin Saeed, chairman of Dubai Airports, said on Tuesday.

“These impressive figures reaffirm Dubai's role as a global hub for trade and travel, and resilience in the face of economic challenges around the world,” he said on Twitter.

State-owned operator Dubai Airports forecasts the number of passengers that will pass through the hub by the end of this year will reach 78 million, up from 66.1 million last year, as the UAE prepares to host major international events such as the Dubai Airshow and the Cop28 climate summit.

A full recovery to pre-pandemic levels on a monthly basis could come by the end of this year, or the beginning of next year, if monthly passenger figures reach 7.5 million, Paul Griffiths, chief executive of Dubai Airports, told The National in February.

In the first two months of the year, western Europe was the largest source of visitors to Dubai by region, making up 22 per cent of the total volume, the latest DET data showed.

The GCC and South Asia followed, each accounting for 16 per cent. India was the largest source of tourists to Dubai by country, with 401,000 visitors in January and February. This was followed by Russia with 229,000, Oman with 201,000, the UK with 196,000 and Saudi Arabia with 183,000.

Oman overtook Saudi Arabia as the largest source of tourists from the GCC countries to Dubai in the first two months of the year. Visitor numbers from Saudi Arabia are still about one-third below pre-pandemic levels for the first two months of the year, while the number of visitors from Oman is around 15 per cent above January-February 2019 levels.

Chinese visitors, one of the largest sources of tourism to Dubai in the last decade, grew 176 per cent year-on-year to 52,000 in January and February. However, this was down 75 per cent for the same period in 2019.

“We do expect the number of visitors from China to Dubai to continue to rise over the course of the year,” Emirates NBD said in its report.

Last month, the director general of Dubai's Department of Economy and Tourism said he expects a greater influx of Chinese tourists within the next six to 12 months, after the Asian country loosened Covid-related travel restrictions, as airlines increase the number of international flights.

Dubai's hospitability sector is also rebounding strongly. Hotel occupancy rates in January and February rose to 84.4 per cent, up from the 78 per cent recorded in the first two months of 2022 and 84 per cent in 2019, according to DET data.

“Although the guests’ length of stay declined from 4.3 nights to an average of four nights, and the average daily rate declined by 2 per cent to Dh623, the average revenue per available room increased by 6 per cent year-on-year to Dh514, a 19 per cent increase from 2019, despite the significant rise in the supply of available rooms,” Emirates NBD said.

The number of total available rooms grew by 7 per cent on an annual basis to 148,450 rooms. Five-star hotels had the largest share of the inventory with 34 per cent, while four stars hotels comprised 29 per cent and hotels from one to three stars made up 20 per cent, DET data showed.

A calendar of corporate and entertainment events, coupled with the increase in tourist numbers, have “firmly placed the hospitality sector on a growth track”, according to Faraz Ahmed, associate at the research unit of property consultancy JLL Mena.

Dubai’s hotel stock rose to 150,000 keys in the first quarter of the year, with the delivery of around 2,000 keys, according to a JLL report on Tuesday. Propelled by increased demand, around 8,000 keys are expected to be delivered in the year, it said.

“With the continuous growth in tourist numbers and a well-planned calendar of events throughout the year to cater to various segments of the market, the hospitality industry is expected to sustain its growth in the UAE,” the report said.

However, global economic volatilities continue to influence travel trends worldwide, making it critical for hotel operators to apply “effective revenue management strategies” to boost their top-line revenue, particularly for those in the luxury segment, JLL said.