15 November 2023, Emirates NBD
Dubai’s tourism sector received record visitor numbers for the first nine months of 2023. The city attracted 12.45mn international visitors, up 23% y/y and exceeding the previous record registered in 2019 of 12.08mn visitors. The strong growth this year is being reflected in GDP data for Dubai, with hotels & restaurants recording real growth of 14.4% y/y in Q2.
Western Europe was the largest source of visitors, making up 19% of the total volume in the first nine months of 2023, followed by South Asia making up 18%. The GCC accounted for 16%, Eastern Europe and MENA both made up 13% respectively.
India was the largest single source of tourists with 1.8mn visitors followed by Saudi Arabia with 856k visitors, the United Kingdom with 825k visitors, Russia with 806k visitors, and Oman with 789k visitors.
Dubai International Airport saw 41.6mn passengers in H1
According to Dubai Customs, Dubai international airport, the world’s busiest international airport, experienced a significant 50% y/y increase passenger traffic in the first half of 2023, reaching 41.6mn passengers. Paul Griffiths, the CEO of Dubai Airports, revealed that 60% of passenger traffic is point-to-point, marking a reversal from the pre-pandemic trend that of 40% point-to-point and 60% transit. The surge in point-to-point passenger traffic reflects Dubai’s growing appeal as a global destination. Emirates Airlines has also announced the purchase of 95 Boeing planes for USD 52bn, providing a substantial boost to the tourism sector and passenger traffic over the upcoming years. Dubai airport is projected to handle 85mn passengers in 2023, slightly below the record of 89.1mn passengers set in 2018. This has been an instrumental support for Dubai’s economic expansion in 2023, as the Transport & storage sector has been the key growth driver over the first half of the year, recording 10.3% y/y in Q1 and 10.7% in Q2. Indeed, the GDP press release on WAM highlighted the positive contribution made by the national air carriers.
Rise in hotel occupancy
The average hotel occupancy for the first nine months of 2023 rose to 75.7%, a 4.9pp increase over the same period in 2022, and 2.3pp higher than 2019 according to data from DTCM. Although the guests’ length of stay declined from 4 nights to an average of 3.7 nights, the occupied room nights grew by 13% y/y and 32% from 2019 to 30.44mn nights. The average revenue per available room grew by 2% y/y to AED 358 despite the 5% y/y decline in the average daily rate to 473 AED. The number of total available rooms grew by 4% y/y to 148,809 rooms. Five-star hotels had the biggest share of the inventory with 35%, while four stars hotels made up 28%, and hotels from one to three stars made up 20%.
The fourth quarter has historically been a strong quarter for Dubai Tourism. Last year, Dubai welcomed over 100k visitors on New Year’s Eve alone. The tourism sector is set to receive a further boost this year as Dubai hosts the COP28 climate conference at Expo City from November 30 to December 12. More than 70k delegates are expected to attend from more than 190 countries. Given the positive outlook, Dubai is on track to surpass the 16.7mn visitors recorded in 2019 this year.