Dubai’s hotel occupancy has plummeted since the outbreak of the coronavirus and about 30% of workers in the industry will probably lose their jobs, according to research firm STR Global.
About 43,000 hotel rooms, about a third of the total, will probably remain closed until September as most owners channel reservations into fewer properties to save on operating costs, Philip Wooller, Middle East and Africa director at STR Global, said in an interview. The industry employs about 40,000 people, he estimated.
The job-loss estimate is a “minimum” Wooller said. “Otherwise you’re asking the owners to reach into their own pockets and, while some might do that, others won’t be able to afford it.”
From the Roman columns of the Palazzo Versace to the Ottoman domes of Zabeel Saray, Dubai has built a collection of monuments to attract tourists. The city has about 120,000 rooms and a market where occupancy has been among the world’s highest for years. Among other setbacks, the pandemic has led to the one-year postponement of the Dubai 2020 international exhibition.
Occupancy was about 23% since the beginning of April as the global pandemic halted the travel and tourism industries worldwide. Average occupancy globally is around 20% and has been mostly helped by demand for accommodation for medical staff and quarantines.
Tourism contributed 11.5% to Dubai’s economic output in
2019 as 16.7 million tourists visited the city, according to the government. At the end of February, occupancy stood at 80%, the Emirate’s tourism authority estimated.
Abu Dhabi Better
Abu Dhabi’s hotels fared better, with just 17% of the city’s 29,000 rooms closed. Occupancy is hovering around 50% as the government leases rooms for essential staff and for quarantines, according to STR Global.
Closures have hit most hotels in the rest of the Gulf, with nearly 43% of rooms in the Omani capital being shuttered. In Mecca, more than 80% of rooms were closed as the city that hosts Islam’s holiest site, suffered the worst outbreak in Saudi Arabia. Meanwhile, some hotel owners in Qatar are benefiting from the government leasing nearly 30 properties. Qatar, which is set to host the soccer World Cup in 2022 is still benefiting from demand as infrastructure preparation continues.
While many of hotels will remain closed through the summer, some operators may see demand rise as people unable to travel abroad seek local vacations instead. Beach hotels will probably get most of that demand.
“If people are feeling a bit safer and have some money to spend, there will be opportunities for staycation offers, and we’re already seeing some of those,” Wooller said.