Dubai stars as Middle East leads global post-COVID tourism recovery

Dubai is playing a leading role in helping establish the Middle East as the world’s fastest-growing tourism destination in the wake of the COVID-19 pandemic, according to new research from HSBC.

HSBC Global Research’s new ‘Jet, set, go!’ report reveals that the Middle East was the only region worldwide to welcome more international visitors in the first quarter of 2023 than it did in Q1, 2019, prior to the onset of the COVID-19 pandemic.

In fact, the region registered a 15% increase in visitors arrivals in Q1, 2023, compared with four years prior. Europe ranked second overall, reaching 90% of its pre-pandemic visitor numbers.

“The Middle East region saw the strongest performance in terms of recovery in tourism and is the first region in the world to recover beyond pre-pandemic numbers,” commented Maitreyi Das, author of the report and Economist at HSBC Securities and Capital Markets. “On perceptions, 40% of [survey respondents] think that tourism recovery has already been achieved in the Middle East, while 20% [believe] it will recover by [the end of] 2023.”

Dubai spearheads overall recovery and future growth

While the report reveals Qatar and Saudi Arabia helped drive the regional industry’s first-quarter recovery, Dubai’s performance in the first half of 2023 demonstrates the emirate’s enduring popularity as one of the world’s leading tourism destinations and business hubs.

Dubai welcomed a record 8.55 million international overnight visitors in the six months to June, compared with 8.36 million tourists in H1, 2019. The result also marked a 20% increase compared to the first half of 2022.

“The remarkable surge in international visitors… further demonstrates [Dubai’s] emergence as one of the brightest spots not only in the [global] tourism sector but also the broader economic landscape,” said HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and chairman of Dubai Executive Council.

“While the growth of international visitation reinforces Dubai’s rise as a major global tourism destination, it also signifies its status as a pivotal hub for trade, investment and enterprise.

“The Dubai Economic Agenda D33 [outlines] an ambitious new trajectory for the city to further consolidate its status as one of the world’s top urban economies and tourism destinations. As a major pillar of Dubai’s economy, the tourism sector will continue to play a key role in realising its future aspirations.”

Hoteliers reap the benefits of record-breaking visitor arrivals

Dubai’s hotel sector outperformed pre-pandemic levels across all hospitality metrics in H1, 2023, including occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR) and length of stay, spelling good news for operators and investors.

The city’s average hotel occupancy rate of 78%, which was 2.2% higher than the same period in 2019, ranked among the world’s highest during the first half of 2023.

The result is particularly noteworthy given the 26% increase in guestroom inventory between the two periods, with 810 hotels now operating with 148,689 rooms, compared to 714 hotels with 118,345 rooms at the end of H1, 2019.

Guests are also choosing to stay longer in Dubai compared with four years ago, with the average length of stay increasing from 3.5 to 3.9 nights, while occupied room nights rose 12% YoY and 32% compared with H1, 2019, to 20.73 million.

The H1, 2023 ADR of AED534 represents a 20% increase compared with H1, 2019, while RevPAR was also up 24% to AED415 this year.

“The H1 industry performance is testament to the future-oriented strategy of our visionary leadership to position Dubai as the best city in the world to visit, live and work. Within a highly competitive global tourism ecosystem, Dubai has continued to accelerate momentum and stay ahead of the curve, primarily by highlighting the diversity of the city's offerings and the flexibility of our portfolio,” commented Issam Kazim, CEO of Dubai Corporation for Tourism and Commerce Marketing.

“Central to our success in showcasing Dubai as a must-visit destination is fostering multi-level partnerships between the public and private sectors.”

Dubai also stands to benefit from the growth of key inbound tourism source markets, such as China, over the next decade. According to HSBC research, Mainland China outbound tourism expenditure will grow from US$100 billion in 2022-2030 to US$175 billion by 2030-2040.

China accounted for the biggest overall YoY increase in visitor arrivals to Dubai in the first half of 2023 at 260,000, marking a 297% rise compared to the same period last year.