Iranian visitor numbers to Dubai up by 41% in 2014

Dubai recorded a 41 per cent rise in Iranian tourist numbers in 2014, while the emirate saw a marked slowdown in visitors from Russia, the United States and Germany, a new report showed.

According to the Middle East Hotel Market Insight report by audit firm Deloitte and STR Global, Dubai also saw a 24 per cent growth in Chinese tourists last year while Saudi Arabia became its top source market for tourists.

Russian tourists to Dubai fell by 15 per cent in 2014, largely owing to the currency devaluation and political problems within their country. The figure is much lower than the emirate’s tourism agency’s official estimates, which indicated that Russian visitor numbers fell by 23.5 per cent in 2014.

In addition to Russians, Dubai saw a 3 per cent fall in US visitors while German tourist numbers dwindled by 11 per cent, the report said.

The emirate’s top tourism source markets in 2014 were Saudi Arabia (1.5 million visitors), India (0.9 million visitors) and the United Kingdom (0.8 million visitors).

Although the report did not offer any figures for this year, it noted that the demand for hotel accommodations had considerably slowed to 5.1 per cent in the first nine months of 2015, from 6.4 per cent in 2014.

Meanwhile the supply of hotel rooms to the market rose by 6.7 per cent, outpacing the demand. The mismatch between demand and supply pushed down the occupancy rate by 1.3 per cent, the report said. Average daily rates also fell as a result of this imbalance.

“Despite the changing market dynamics in Dubai, demand for hotel rooms will continue to grow in 2015,” said STR global area director Philip Wooller.

“The current drop in the average room rate will have a positive effect in maintaining the occupancy levels throughout the city and to some extent this shift was necessary to keep Dubai competitive as it moves towards achieving its targeted growth in visitors during the Expo year in 2020.”

Dubai, which is aiming to attract about 20 million tourists annually by 2020, has evoked concerns of an over supply in the hotel sector with an increasing number of properties in the construction pipeline.

But experts say there will be a sustained demand for rooms, especially due to the connectivity that the emirate has with the rest of the world.

Dubai had 369 hotels in July 2015, according to data provided by STR Global. This reflected a compound average growth rate of 5.25 per cent from the 233 hotels in 2006. Over this period the number of rooms in Dubai rose from 39,000 across all sectors of the market to 75,600.