Tourism in Dubai Expected to Pre-Covid Numbers in 2023
Dubai is on track to surpass its pre-pandemic annual number of international visitors this year, a new report suggests, thanks to an increasing influx of tourists. Data from Dubai’s Department of Economy and Tourism (DET) reveals that the emirate welcomed 3.1 million visitors in the first two months of 2023.
Emirates NBD, a leading bank in the region, has assessed that the number of visitors to Dubai in January rose by 50% year-on-year and was just 9% below pre-pandemic levels of 2019. However, the number of visitors in February exceeded pre-pandemic levels, reaching 1.63 million, a 7% increase from 2019 and a 35% rise year-on-year. This strong start to the year indicates that Dubai's tourism industry could surpass the record 16.7 million visitors in 2019.
Tourism, a vital component of Dubai's economy, has bounced back robustly from the coronavirus-induced downturn. In 2022, the emirate recorded 14.36 million international visitors, inching closer to the 16.73 million tourists in 2019. According to Euromonitor's report on the top 100 city destinations in 2022, Dubai ranked second behind Paris.
Business activity in Dubai's non-oil private sector economy reached a five-month high last month, with growth rates hitting multiyear records. Dubai International Airport continued to be the world's busiest international hub for passengers in 2022 for the ninth consecutive year. In March, the airport handled 16,713 flights, a 23.7% annual increase and exceeding pre-pandemic levels for the same period, according to Sheikh Ahmed bin Saeed, Chairman of Dubai Airports.
State-owned operator Dubai Airports anticipates that the number of passengers passing through the hub will reach 78 million by the end of this year, up from 66.1 million in 2022. This growth is expected as the UAE prepares to host major international events such as the Dubai Airshow and the Cop28 climate summit.
In the first two months of 2023, Western Europe was the largest source of visitors to Dubai by region, accounting for 22% of the total volume. The GCC and South Asia followed, each contributing 16%. India was the largest source of tourists by country, with 401,000 visitors in January and February.
Dubai's hospitality sector is also showing strong signs of recovery. Hotel occupancy rates in January and February reached 84.4%, up from 78% in the same period in 2022 and 84% in 2019. The number of available rooms increased by 7% year-on-year to 148,450 rooms.
A busy calendar of corporate and entertainment events, as well as rising tourist numbers, have contributed to the growth of the hospitality sector. According to a report by property consultancy JLL Mena, Dubai's hotel stock reached 150,000 keys in Q1 2023, with around 2,000 keys delivered. Approximately 8,000 keys are anticipated to be delivered in 2023 due to increased demand.
However, JLL notes that global economic uncertainties continue to affect travel trends worldwide, emphasizing the importance of effective revenue management strategies for hotel operators, particularly those in the luxury segment, to boost their top-line revenue.