Dubai hotel room rates continued to rise in July despite a fall off of occupancy during the summer and Ramadan.
According to the latest HotStats survey of full service hotels by TRI Hospitality Consulting the average room rate in Dubai and Abu Dhabi increased by 6.4 per cent to US$188.51 in July 2012, compared to the same period in June.
However, occupancy levels in Dubai fell 11 percent to 70 percent during the same period the report stated.
Dubai Statistics Centre has also recently reported that nearly four million guests stayed in Dubai hotels in the first six months of this year.
There are currently 577 hotels in with the total number of rooms and serviced apartments at 75,171 according to Dubai Tourism and Commerce Marketing (DTCM).
The hotel industry in Dubai is worth US$10.9 billion according to DTCM and is a driver in attracting international tourists and businesses to the Emirate.
Individual investors who traditionally have turned to the Dubai property market have been looking to tap into the hotel sector for a while, but the price point and heavy competition from international chains has made this impossible for all but the very wealthy.
Despite the large number of luxury hotels in Dubai, there are just 200 serviced apartment buildings. This is one area, however, where investors can purchase an apartment within the complex and either rent it themselves or hand it to a management company who will rent it as part of a pool.
Many of Dubai’s tourists come from the GCC where the number of family members is quite high relative to the international average. These families are often looking for more of a homely feel when travelling, instead of paying through the roof for three or four hotel rooms.
The number of serviced apartments is set to grow in the coming years as demand for five-star luxury within a private space increases. DAMAC Properties is already looking to diversify into this area and have stated that they will have 4,000 rooms under development for management by its DAMAC Suites & Spa arm by the end of next year.
Its first serviced apartment building, Burjside Boulevard, will handover in Q1 2013.
As more tourists flock to Dubai – Dubai International airport welcomed nearly 28 million passengers in the first six months of 2012 – demand for hotel accommodation, and the opportunities to invest in this sector will only increase.