Dubai tourism off to a strong start in 2023

Dubai’s tourism sector has started the year strong, with 3.1 million visitors in the first two months. In January, the number of visitors increased by 50% y/y, but was still 9% below pre-pandemic levels. However, in February Dubai’s tourism exceeded pre-pandemic levels with 1.63 mn visitors, up 7% from 2019 and 35% y/y. Western Europe was the largest source of visitors making up 22% of the total volume, followed by the GCC countries and South Asia, each making up 16%. India was the largest source of tourists with 401k visitors in January and February followed by Russia with 229k, Oman with 201k, the UK with 196k and Saudi Arabia with 183k.

Total number of visitors 

Source: DTCM, Emirates NBD Research

Oman largest source of visitors from the GCC

In 2022, Oman overtook Saudi Arabia as the largest source of tourists from the GCC nations. This still appears to be the case in the first two months of 2023. Visitor numbers from Saudi Arabia are still around one-third below pre-pandemic levels for the first two month of the year, while the number of visitors from Oman is around 15% above Jan-Feb 2019 levels.  

International visitors by source region

Source: DTCM, Emirates NBD Research

Slow recovery in Chinese visitors

The pandemic took a huge toll on the number of Chinese visitors to Dubai. China, one of the largest sources of visitors to Dubai in the last decade, recorded 52k visitors in January and February, down 75% for the same period in 2019. The number of Chinese visitors may not fully recover to pre-pandemic levels in 2023, with Bloomberg reporting that 40% of Chinese travelers are not planning to travel overseas in 2023, citing the impact Covid had on their salaries and savings.  However, we do expect the number of visitors from China to Dubai to continue to rise over the course of the year.

Number of Chinese visitors

Source: DTCM, Emirates NBD Research

Hotels occupancy back to pre-pandemic levels

The average hotel occupancy for January and February of 2023 rose to 84.4%, a 6.4pp increase over the first two months of 2022, and 0.2pp higher than 2019 according to data from DTCM. Although the guests’ length of stay declined from 4.3 nights to an average of 4 nights, and the average daily rate declined by 2% to AED 623, the average revenue per available room increased by 6% y/y to AED 514 (USD 140), a 19% increase from 2019, despite the significant rise in the supply of available rooms. The number of total available rooms grew by 7% y/y to 148,450 rooms. Five-star hotels had the biggest share of the inventory with 34%, while four stars hotels made up 29%, and hotels from one to three stars made up 20%.

Growth in hotel occupancy and RevPAR  

Source: DTCM, Emirates NBD Research

Dubai has established its name as a global behemoth in the tourism and hospitality sector, becoming one of the most favorable destinations for tourists over the past decade. Dubai came second behind Paris in a report by Euromonitor that revealed the top 100 city destinations in 2022. The strong start for the year shows promising signs that Dubai’s tourism may exceed the record number of visitors of 16.7mn in 2019.