Suite success Dubai hospitality survey 2021 - June 2021 KPMG Lower Gulf - assets.kpmg
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Suite success Dubai hospitality survey 2021 June 2021 KPMG Lower Gulf
Foreword
Throughout the past year,
individuals, businesses and
business hotels. Dubai’s popularity
as a staycation destination has been
nations alike have been forced key in supporting the emirate’s
to manage social, medical and hospitality sector.
economic upheaval. Sectors such
as tourism and hospitality were hit The industry has also pivoted to
particularly hard by the pandemic, meet customer demands regarding
as international travel ground to a safety and hygiene, while striving to
near halt. The United Arab Emirates’ manage operating costs. This has
(UAE) hospitality sector—particularly been accomplished using a variety
in Dubai and Abu Dhabi— was of technological solutions, including
significantly impacted, when online check-in, robotic process
compared with pre-pandemic levels. automation and chatbots.
Despite a turbulent year, the country Our 2021 Dubai hospitality report
has, however, managed to record explores how Covid-19 has impacted
the second highest occupancy rate in-country travel and visitors’
globally in 2020 (54.7%), behind experiences in Dubai. Findings
China. This, despite strong outbound include insight from both UAE-
travel restrictions among many of based consumers and industry
the UAE’s main source markets. owners/operators.
The nation’s tourism landscape We hope you find this report
has undergone a significant shift, informative. If you would like to
with domestic travel far exceeding discuss the findings in greater detail,
international visits and luxury, beach please feel free to contact us.
and desert resorts outperforming
Sidharth Mehta
Partner
Head of Real Estate
KPMG Lower Gulf
e: sidharthmehta@kpmg.com
2 Suite success Dubai hospitality survey 2021 3
Contents
06 10 12 16
Page Page Page Page
Recovering rates Here to stay(cation) Safety first Service remains
world class
References 26
About KPMG 27
Contact us 28
18 20 24
Page Page Page
Tempting travelers Unlocking Methodology and
to return the future demographics
4 Suite success Dubai hospitality survey 2021 5
Recovering
rates
Accounting for 10.3%1 of global restrictions are expected to impact rates have steadily improved as 2020-21 Dubai hotel occupancy levels (%)
gross domestic product (GDP), the an estimated 100-200 million direct a result of various hygiene and
travel and tourism (T&T) industry is jobs in the industry. In the UAE, safety measures. December
vital for many economies, including the number of visitors traveling to 2020 marked a twelve-month
69.1 65.9
the UAE. With the global outbreak Dubai decreased by almost 67%: high of 69%, followed by a slight 55.8 58.2 60.5 59.4
of Covid-19, the T&T industry from 16.7 million in 2019 to 5.5 decrease to 59.4% in April 2021 45.1 49.9
suffered its worst year on record million visitors in 2020.2 due to Ramadan.3 The emirate’s 41.0
in 2020, experiencing a 74% drop occupancy levels are significantly
in international arrivals. Around After nosediving to less than 25% higher than the Middle East and 27.7 30.2
the world, pandemic-related travel in April 2020, Dubai’s occupancy Africa region’s 2020 rate of 49%.4
23.6 25.7
Apr'20 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr'21
Source:STR
6 Suite success Dubai hospitality survey 2021 7
Revenue per available room 2020, coinciding with the holiday of 2020, hitting USD 165.9 in 2020-21 Dubai hotels ADR (USD)
(RevPAR) in Dubai grew by more period.5 As of April 2021, RevPAR December. The new year witnessed
than 550% during 2020. After for the emirate stood at USD 92.9. a decline however, with April ADR
hitting a low of USD 17.2 at the start Average daily rate (ADR) for at USD 156.4.6
of the pandemic, RevPAR reached hotels in the emirate also gained 165.9 160.2 156.4
a peak of USD 114.7 in December momentum toward the end 148.4
128.8
98.1 99.9 107.5
89.6
72.6 65.6 75.2 76.7
2020-21 Dubai hotels RevPAR (USD)
114.7 105.7
74.9 89.8 92.9 Apr'20 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr'21
59.9 Source:STR
49.9 Exploring occupancy, RevPAR and Current travel restrictions applicable In addition, vaccination programs
40.3 34.6 ADR, it becomes clear that the to key source markets (i.e. India continue to expand, demand related
emirate’s hospitality industry is in and the UK) will put pressure to Expo 2020 will increase, and
27.1 the process of recovering after a on occupancy in the summer travel restrictions will gradually
17.2 18.2 19.3 significant drop across indicators. months. However, with school ease. As a result, occupancy and
However, while luxury, beachfront holidays starting in July, demand for rates are expected to continue to
and desert resorts were able to staycations will further increase— improve toward the latter half of
reduce cost and attract domestic even during the weekdays. the year.
Apr'20 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr'21 guests, budget and business
hotels have struggled to maintain
Source:STR
occupancy and ADR.
8 Suite success Dubai hospitality survey 2021 9
Here to
stay(cation)
The hospitality industry’s recovery Domestic room
has been driven by local demand.
The popularity of domestic nights accounted
travel, or “staycations,” has been
supported by government-issued for 78% in 2020
health and hygiene mandates. In
fact, while international arrivals
compared with just
plummeted, the number of room 19% in 2019.
nights sold to domestic tourists
throughout the UAE surged from
2.74 million in 2019 to 5.68 million
in 20207—an increase of 107%.
Domestic room nights accounted
for 78% in 2020 compared with
just 19% in 2019. Domestic
tourism spending stands at AED
41 billion.
The domestic market will continue
to be a critical driver in 2021 and
beyond. Events held in Dubai
during the winter—such as the
Dubai Shopping Festival and
Dubai Food Festival—will likely
bolster demand, in line with the
nation’s newly-launched domestic
tourism strategy. Hoteliers will play
an important role in developing
offerings, including activities,
special resident rates and
hospitality services.
10 Suite success Dubai hospitality survey 2021 11
Safety
first
In line with awareness of Some staycationers suggest hotels Covid-19. However, only 38%
government-led sanitization provide masks and sanitizers have vacationed in a local property
policies and owner/operator during the stay to complement the to date, indicating potential
efforts, 80% of consumers are experience. More than half (55%) for growth.
confident that Dubai’s hotels apply stated they were likely to stay at
the required level of sanitization. a hotel in Dubai, notwithstanding
Would you consider
77% Yes
In an effort to assist travelers and Dubai Assured stamp in June of received a Dubai Assured stamp,
owner/operators, the World Travel 2020, with the goal of assuring certifying its sanitization protocols.
& Tourism Council established the visitors that hotels, restaurants, Consumers continue to express whether a property
Safe Travels global protocols and retail outlets and attractions are in a high degree of concern around had received the
stamp in early 2020. In recognition line with international health and Covid-19-related safety measures.
of the emirate’s successful safety standards and protocols.9 Many feel appropriate monitoring,
Dubai Assured stamp
citywide management of the high standards of cleanliness and before making a hotel
23% No
Among UAE residents, we find
pandemic, Dubai was awarded the
more than three-quarters (77%)
effective handling of common reservation?
Safe Travels stamp in July 2020, spaces are critical when it comes
of those planning to stay in Dubai
cementing its position as one of to improving customer experience
would take into consideration
the world’s safest destinations.8 and creating a sense of safety.
whether or not the property
Locally, the emirate launched the Source: KPMG Dubai hospitality survey 2021 – consumers
Given sanitization
requirements related
to hotel operations,
how would you
rate the additional
operational complexity
Low Medium High
and operational costs
caused by Covid-19?
8% 58% 33%
Source: KPMG Dubai hospitality survey 2021 – operators
12 Suite success Dubai hospitality survey 2021 13
How likely are you
to stay in a Dubai Very likely 22%
hotel room/hotel
apartments/holiday
home, given the
Somewhat likely 33%
Covid-19 pandemic?
Neither likely nor unlikely 17%
Somewhat unlikely 14%
Not at all likely 15%
Source: KPMG Dubai hospitality survey 2021 – consumers
14 Suite success Dubai hospitality survey 2021 15
Service remains
world class
Despite Covid-19-related ten (87%) were satisfied with their Seventy-five percent of operators
challenges, Dubai’s reputation for experience and 85% would return. stated that Covid-19 has had a
customer service remains true While some expressed concern significant impact on how visitors
to form. Among those who have about limited facilities, most spend their time in Dubai.
stayed at a Dubai-based property approved of safety measures, such
during the pandemic, nearly nine in as reduced capacity in restaurants.
Were you satisfied Very
with the experience
satisfied 49%
of staying in a hotel Somewhat
during Covid-19 satisfied 38%
in Dubai? Neither satisfied
nor unsatisfied 10%
Somewhat
unsatisfied 13%
Source: KPMG Dubai hospitality survey 2021 – consumers
When welcoming
guests, could you High 75%
please indicate what
kind of impact Covid-19
has had on the way
hotel guests spend
their vacations?
Medium 25%
Source: KPMG Dubai hospitality survey 2021 – operators
16 Suite success Dubai hospitality survey 2021 17
Tempting travelers 85%
During Covid-19,
many Dubai-based
hotels developed Yes
campaigns/packages
to boost staycations.
15%
to return
Do you think hotels
should further lower
No
prices to compensate
for changes in the
customer experience?
Source: KPMG Dubai hospitality survey 2021 – consumers
So, what would prompt travelers exhibitions (MICE) segment of travel
Nine in ten (92%) Some food and
53%
to visit? Eighty-five percent of to be at significant risk.10 According
consumers believe there should be to a recent survey by YouGov, four travelers to Dubai beverage outlets and
some type of compensation for the in ten European business travelers facilities are still closed
changed experience—specifically say they will fly less after travel saw the emirate in the Dubai hotels. Yes
an adjustment to price. While the
culinary experience is a big part
restrictions are removed as a result
of video conferencing.
as the safest place Does this affect your
in the world to
47%
of Dubai staycations, opinion was decision to stay in a
divided as to whether changes to While only time will tell how the
conduct business hotel in Dubai?
hotel offerings affect consumers’
decisions to stay at a particular
MICE segment will evolve, as
many as nine in ten (92%) travelers
meetings during
No
property. Some suggested an to Dubai saw the emirate as
option for packages which catered
to family events, such as birthdays
the safest place in the world to
conduct business meetings during
the pandemic. Source: KPMG Dubai hospitality survey 2021 – consumers
and anniversaries, may prompt a the pandemic.
stay during the pandemic. Long-stay
options are also becoming popular Several recent in-person events
among residents, as hotel rates have welcomed guests from various
compete with rental costs. destinations,11 and the emirate
continues to look to the future with
While leisure travel in the region optimism. With the re-opening of
will likely bounce back, the shift Dubai and the resumption of MICE
to remote working may change activities building up to Expo 2020,
business travel in the long term. efforts to reinforce a sense of safety
Sixty-seven percent of owner/ will remain key in rebuilding the
operators believe the meetings, business travel segment.
incentives, conferences and
18 Suite success Dubai hospitality survey 2021 19Unlocking
the future
The nation’s hospitality market recover. Indeed, our survey finds
The nation’s
has shown tremendous resilience, 75% of owner/operators anticipate
boasting the world’s second the vaccine to be effective in hospitality market
highest occupancy rates in 2020.12
And Dubai will likely remain a
boosting occupancy rates. In fact,
half of those surveyed expect has shown
regional and global tourism hub. occupancy rates above 60% in FY tremendous
Leisure and business destinations 2021 and 75% expect occupancy
around the world will only see to return to pre-Covid-19 levels resiliency, boasting
travel increase, as vaccine rollouts
continue and economies gradually
by 2023. the world’s second
highest occupancy
rates in 2020.
What average
occupancy rate do you
expect to achieve in
Above 60%: 50%
FY21?
51-60%: 33%
41-50%: 17%
Source: KPMG Dubai hospitality survey 2021 – operators
Among owner/operators of Dubai- USD 150 or higher. Consistent with
based properties in our survey, the presumed occupancy rates’
half anticipate an average daily rate timeframe, 83% expect ADR to
(ADR) of USD 120-150 in 2021, return to pre-Covid-19 levels in 2023.
with an additional 25% expecting
20 Suite success Dubai hospitality survey 2021 21What ADR do you
expect to achieve
in FY21?
Above USD 150: 25%
USD 120-150: 50%
Less than USD 120: 25%
Source: KPMG Dubai hospitality survey 2021 – operators
Considering existing travel bolstering travelers’ confidence and tourist activities by 134%.
restrictions, short- to medium- and reinforcing the message that In addition, the length of public
term challenges will remain. While Dubai is, indeed, a safe destination. beaches is expected to increase by
occupancy and room rates have Furthermore, 16,000 keys are approximately 400% by 2040. Both
improved, full recovery will be a expected to be delivered in 2021, measures are expected to drive
longer-term journey. adding to the current inventory future growth in the industry.13
of 135,000 keys in response to Given that 67% of owner/operators
The Government of Dubai has the large number of Expo 2020 in our survey expect beachfront
taken steps to position the emirate visitors anticipated, starting in hotels to recover fastest, this
as a sought-after destination. October 2021 is likely a welcome move.14
New developments are expected The approval of multiple tourist
to enhance the city’s appeal, In the long term, these steps are entry visas, remote working visas
from Ain Dubai to the Museum supported by Dubai’s 2040 Urban and student sponsorship visas will
of the Future. In addition, Master Plan, which seeks to also likely help boost the sector.15
increased vaccination rates are enlarge the land used for hotels
22 Suite success Dubai hospitality survey 2021 23Methodology and
demographics
KPMG’s 2021 Dubai hospitality Gender
survey was conducted in Q4
2020 and Q1 2021. A total of
484 consumers were surveyed
across the UAE. Findings are
?
complemented by input from 12
hospitality owners/operators, 55% 39% 6%
responsible for 176 properties in Male Female No answer
the emirate.
Age group
15% 52% 22% 10%
18-24 25-34 35-44 45+
Location Abu Dhabi: 20%
Dubai: 50%
Sharjah: 13%
Other Emirates: 11%
No response: 6%
Owner/operator demographics:
How many properties does your organization own and/or manage
in Dubai?
1-10: 50%
11-20: 17%
21-30: 17%
31 +: 17%
24 Suite success Dubai hospitality survey 2021 25References About KPMG
1
https://wttc.org/Research/Economic-Impact 10
https://www.dubaitourism.gov.ae/en/legislative-news/ For almost 50 years, KPMG Lower Gulf Limited has For FY21, the firm has earmarked a global budget of USD
dubai-launches-dubai-assured-covid-19-health-and-safety- been providing audit, tax and advisory services to 1.43 million for the initiative.
2
https://www.dubai-online.com/essential/tourism-statistics/ a broad range of domestic and international, public
compliance-certification As we continue to grow, we aim to evolve and progress,
and private sector clients across all major aspects of
3
STR striving for the highest levels of public trust in our work.
business and the economy in the United Arab Emirates
11
KPMG Dubai hospitality survey 2020 Our values are:
and in the Sultanate of Oman. We work alongside our
4
https://str.com/press-release/str-middle-east-and-africa-
12
https://www.arabianbusiness.com/travel- clients by building trust, mitigating risks and identifying
hotel-performance-2020 Integrity: We do what is right.
business opportunities.
hospitality/460511-dubai-rated-safest-place-in-world-for-
5
https://str.com/press-release/str-preliminary-june-data- KPMG Lower Gulf is part of KPMG International
business-travellers-new-survey-shows Excellence: We never stop learning
Cooperative’s global network of professional member
dubai-hotels and improving.
13
https://www.arabianbusiness.com/real-estate/460272- firms. The KPMG network includes approximately
6
STR 227,000 professionals in over 146 countries. KPMG in
urban-master-plan-to-boost-dubais-real-estate market?utm_ the UAE and Oman is well connected with its global Courage: We think and act boldly.
7
https://www.hoteliermiddleeast.com/news/121637-dubai- source=newsletter&utm_medium=email&utm_ member network and combines its local knowledge with
campaign=arabianbusiness_newsletters&utm_ international expertise, providing the sector and specialist Together: We respect each other and
domestic-tourism-jumps-by-107-percent-in-2020
skills required by our clients. draw strength from our differences.
email=jduff@kpmg.com
8
https://www.arabianbusiness.com/travel- KPMG is widely represented in the Middle East: along
hospitality/460434-international-leisure-travel-spend-to-
14
KPMG Dubai hospitality survey 2020 with offices in the UAE and Oman, the firm is well For Better: We do what matters.
established in Saudi Arabia, Bahrain, Kuwait, Qatar, Egypt,
take-three-years-to-exceed-pre-coronavirus-levels 15
https://timesofindia.indiatimes.com/travel/travel-news/uae- Jordan and the Lebanon. Established in 1973, KPMG in
To meet the changing needs of our clients, we have
9
https://www.thenationalnews.com/uae/health/dubai- approves-multiple-entry-tourist-visas-for-all-nationalities/ the UAE and Oman employs 1,485 people across four
adopted an approach aligned with our global purpose:
offices, including about 100 partners and directors.
given-safe-tourism-stamp-of-approval-amid-global- as81633353.cms Inspiring Confidence, Empowering Change. Our three
Our latest initiative, KPMG IMPACT, aims to help clients pillars
pandemic-1.1054111
future-proof their businesses amid times of increasing
– exceptional quality of service, an unwavering
focus towards issues such as climate change and social
commitment to the public interest, and building
inequality. The goal is to help them achieve success
empowered teams
across 17 major Sustainable Development Goals (SDGs)
and become more resilient and socially conscious. – are the foundation of our firm.
26 Suite success Dubai hospitality survey 2021 27Contact us
Sidharth Mehta Fahad Kazim
Partner Partner
Head of Real Estate Head of Asset Management
KPMG Lower Gulf KPMG Lower Gulf
e: sidharthmehta@kpmg.com e: fahadkazim@kpmg.com
Walid Daoud Richard Stolz
Partner Associate Director
Audit Advisory
KPMG Lower Gulf KPMG Lower Gulf
e: wdaoud@kpmg.com e: rstolz@kpmg.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the
www.kpmg.com/ae
date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional
advice after a thorough examination of the particular situation. © 2021 KPMG Lower Gulf Limited, licensed in the United Arab Emirates, and
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a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English
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The KPMG name and logo are registered trademarks or trademarks of KPMG International. Designed by KPMG Lower Gulf Creative Team
Publication name: Suite success
Publication number: 3487
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