What attracts capital owners to Dubai


Investment property continues to attract capital owners, and the United Arab Emirates is among the places offering high-yield facilities. The hospitality industry of the Middle East and Africa in early 2018 showed good results, and the Dubai hotel market, which is the leader of regional tourism, remains the most attractive for investments.

According to the company HotStats, in January the hotels of the region achieved growth both in the level of occupancy, and in profitability per number. The latter rose by 1.6% compared to December last year and reached $ 125.91, which is 7.7% higher than in January 2017 for the region.

Revenues from other services in the region’s hotels also increased compared to last year. Revenues from restaurants and cafes grew by 2%, from conferences and banquets – by 4.9%, from leisure services – by 5.2%.

With regard to the level of occupancy of hotels in the Middle East and Africa, on average in the region, the January figure for the year grew by 3.3%, reaching 69.1%.

Dubai, which hotels represent reliable investment projects, in January showed the best results, which is mainly due to the increase in tourist flow from Russia. According to analysts STR, the average cost of rooms in the city grew by 36% in annual terms. The level of occupancy of hotels in Dubai, which is already the highest in the region, increased by 1.5%, having stopped at the level of 86.4%.

Dubai Tourism Department predicts that the cumulative rate of annual increase in the volume of the numbered nights sold in the emirate will amount to 10.2% in the next two years. At the same time, despite the significant expansion of the number of rooms (up to 132,000 units by the end of 2019), it is expected that the level of occupancy will remain within 76-78%, which makes it possible to classify Dubai hotels under construction as a reliable investment property. The growth of the tourism industry in the near future, the diversification of its directing markets, as well as the holding of major events, including Expo 2020, allow to expect positive dynamics in the long term.

The new report of the analytical company Knight Frank says that Dubai will attract even more private owners of large capitals in the next decade.

The main reasons for the growth of this indicator of Dubai were a significant increase in population (more than 76%), as well as major government investments in world-class infrastructure and large events such as the World Expo in the emirate.

New residents from around the world are also attracted by the complex development of new areas of Dubai, such as Dubai South, where they will build not only a venue for the World Exhibition, but also residential complexes, hotels, commercial and tourist facilities. Al Maktoum International Airport is also located here.

Another factor is the developing hospitality industry. In Dubai, there are 61 5-star hotel, and the number of premium hotels in the city is second only to London, where there are 75 such hotels.