While the exhibitions hub Dubai World Trade Centre (DWTC) is set to receive hundreds of thousands of visitors during the busy fourth quarter, hotels on Sheikh Zayed Road will feel the pressure of increased inventory.
The venue will host more than 60 exhibitions and conferences, including Gitex Shopper, Gitex Technology Week, Gulfood Manufacturing, the construction event Big 5 and Dubai International Motor Show, attracting around 820,000 visitors.
The centre hosts about 500 events across trade fairs, live performances, consumer shows, conventions and private product launches, drawing 2.2 million visitors a year, according to DWTC.
“This peak season at DWTC is a crucial time for regional and international businesses,” said Ahmed Alkhaja, the senior vice president for venues at DWTC, referring to the fourth quarter.
The meetings, incentives, conferences, and exhibitions (Mice) sector in the Arabian Gulf is valued at US$1.3 billion, with the UAE accounting for half of that at $653 million, according to Mr Alkhaja.
The 25th edition of eight-day Gitex Shopper, which starts on October 3, reported 211,398 visitors last year with sales of Dh259m. The five-day Gitex Technology Week that follows on October 18 expects over 140,000 visitors this year. Three-day Gulfood Manufacturing, which starts October 27, drew 26,329 visitors last year.
Despite these numbers, hoteliers near DWTC and along Sheikh Zayed Road can expect to feel the pressure on the room rates and occupancies as more rooms come on stream.
Although hotel demand in the area is expected to grow, the growth in supply will outpace demand growth over the next couple of years, according to Rashid Aboobacker, a senior consultant at TRI Consulting.
“Hotels on Sheikh Zayed Road are likely to be affected by the upcoming new properties in the area, including its surrounding districts such as Business Bay, Downtown and DIFC,” he said. “Consequently, occupancy and average room rate are likely to decline 5 to 10 per cent during this period, but are likely to rebound in the following years once the additional supply is absorbed by the growing demand.”
Al Habtoor Group expects to open three hotels – St Regis, Westin and W Hotel – in the vicinity around 1,600 rooms from this year.
Despite the slowdown in the global economy, the exhibitions sector is expected to grow.
“With sectors such as banking and financial services, medical and health care, and tourism poised to grow significantly over the coming years in Dubai, we expect continued growth in the number of exhibitors and visitors at the DWTC in the near future,” Mr Aboobacker said.
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