Dubai Airport currently ranks as the third busiest airport in the world with an annual capacity of 70.5 million passengers after Georgia and Beijing. Strategically located within the close reach of various important destinations, Dubai serves as a hub and transit destinations to over 120 flight carriers around the world. Adding to the value, a new terminal namely Al Maktoum International Airport that has recently been made operational from October 2015 and some of the major low cost carriers within Middle East have already started its flights. More flights gradually are adding their fleets to this terminal as well which will actually take the annual handling capacity of passengers to 75 million by March 2016.
As per the studies published by Department of Tourism and Commerce Marketing (DTCM) Dubai currently hosts more than 15 million tourists every year, and with an annual growth rate of 8% – 9% Dubai is most likely to reach a target of 20 million tourist annually by the end of 2020. According to Global Destination Cities Index annually published in 2014 by Master Card, Dubai has already superseded New York by being ranked as number 4 in the world, with very less margin behind Paris, Singapore and Bangkok. When it comes to these kinds of numbers, apart from tourist destinations and other requirements, one of the major requirements that come up are in that of Hospitality industry that includes Hotels, Resorts and Hotel Apartments. Globally, it is has been witnessed that hospitality industry revenue is directly proportional to the tourism of the region, and as Dubai tourism grows there will be further requirements emerging for hotels and hotel apartments. Dubai is currently home to over 150, 5-star and 4-star hotels and the list is soon to grow exponentially. An immense growth has been witnessed over the past decade particularly in the hotel apartments, where from a capacity of 67,369 rooms in 2010 it has grown to over 110,000 rooms in 2014, and by 2016 the figures are further going to go up with some major renowned hospitality brands in the world starting up the ventures soon.
Another positive aspect that has been witnessed in the past few years is the occupancy of the rooms which have also gone up with a year round average of 85% from 70%. Primarily this is because of off season offers by some low cost carriers in the region, and also due to new initiatives by tourism departments to attract more tourists from other parts of the world.
From investment prospect, hotel apartments are great investment opportunity in Dubai currently, as the average yield of hotel apartments are over 10% net which is a great number in terms of annual return as compared to other region’s average of 7 to 8%. The newly announced projects in various regions and some important new regions of Dubai, offers a great opportunity today to invest in the right option. However, with numerous hotels and hotel apartments investment opportunities available, it is important to ensure and foresee from where will be the maximum benefits will be attained. It is important to consult in this regard with any specialized person within that particular region to understand the pros and cons of investing in Hotel Apartments and expected returns from their investments.
Dubai also offers further values with these kinds of investments like investor visas over an investment of one million and tax free income at every level. Considering the above numbers and the growing demand of Dubai tourism, it is most likely that the hospitality industry is going to grow further in coming years. In order to support the growth the Government of Dubai has also invested in some multibillion infrastructure projects like expansion of airports, malls, new metro lines, educational institutes, freezone businesses and world class medical facilities which will further grow tourism not only through leisure domain but also through the people who are seeking other purpose.
In order to better understand about Dubai, and specially investing in Dubai, you can contact SPF Realty, which is the awarding winning and leading real estate firm. Recently the company has been ranked again second time as Dubai’s top one hundred performing SME.