Emaar Properties, Dubai's largest developer, enjoyed a jump in revenues across its retail and hospitality divisions
Tourism boom brings big rewards for Emaar
Emaar Properties, Dubai's largest developer, has been a major beneficiary of the UAE's booming tourism and retail markets this year.
Revenues from hospitality, which are driven by the group's hotels, increased 30 per cent to Dh619 million (US$168.5m) in the first six months of the year compared with the same period last year, the company said yesterday.
"It's definitely an indicator of a pickup in tourist activity," said Majed Azzam, an analyst with AlembicHC.
"Tourists are coming back and the hotels are benefiting from that."
Emaar owns and manages a portfolio of assets such as the Address hotel brands, serviced residences, golf resorts and the Dubai Marina and yacht club. It also has an agreement with Armani to own and run its branded hotels.
The company announced last month it suffered a 69 per cent drop in profit for the second quarter as it took a Dh172m writedown on its investment in Dubai Bank.
It posted a profit of Dh250m for the quarter, compared with Dh802m for the same period last year. Total revenue for the quarter was Dh2.03 billion, a 23 per cent decrease on last year's corresponding period.
In yesterday's statement, the company broke down revenues by each segment of its business, with retail and hospitality enjoying buoyant sales but revenues from apartment sales falling significantly.
Revenues for its retail leasing business, which includes Dubai Mall, Marina Mall and the offices at Emaar Square, rose 17 per cent to Dh1bn. The company receives fixed rental payments from retail tenants in its malls, along with a proportion of sales profits if the retailer is performing strongly.
"This is the main reason for the increase, and retail occupancy is picking up in Dubai Mall as well as Marina Mall," Mr Azzam said.
More than 1 million tourists visited Abu Dhabi's hotels in the first six months of the year. Occupancy also increased in Dubai as unrest elsewhere in the Middle East and North Africa deterred tourists from visiting those areas.
Occupancy in Dubai's hotels rose 0.7 per cent to reach 69.9 per cent during May despite an increased supply of hotel rooms, according to the accountancy firm Deloitte.
"There's no doubt that the hospitality and tourism market has turned around. [These results] are one of many indicators," Mr Azzam said.