Posted On November 29, 2020 CPP-LUXURY
With hundreds of hotels ranked ‘five star’, Dubai’s hospitality industry had been facing an identity crisis even before the pandemic, dominated by over-supply coupled by a lacklustre product (many properties have not been renovated in over 10 years), a dining offering which is neither appealing to hotel guests, nor to locals or expats – not to mention a predominant mediocred wellness and Spa offering.
Then, there is a clear differentiation of five star hotels which have their own beach or beach access and city properties which rely on their swimming pools and dining, at most with a kids club and maybe a Spa and gym. Then there are also hotel groups such as Jumeirah which attract a higher number of Emiratis than all other luxury hotels. With the exception of Rosewood and Aman, all luxury international hotel brands are present in Dubai, some even with multiple properties.
Beach clubs (local version of night clubs) such as Nammos at Four Seasons Resort Dubai at Jumeirah Beach and FIVE at the Palm Jumeirah FIVE Hotel have each been severely fined and shut down for overcrowding and owners / operators not implementing the minimal Covid-19 safety and hygiene measures. Most recent incidents at both clubs involved substance abuse and and violent fight. Nikki Beach Dubai has been fined twice, but not shut down. Market leader, COVE Beach at Caesars Palace Bluewaters Dubai has been running a smooth operation.
Mention must be made that while Dubai officially re-opened after lockdown on July 27th 2020, most of the five star and luxury hotels have been solely relying on staycations, especially for August to September, some registering occupancy levels of 50% on average and slightly higher over weekends. As for mid October, the volume generate by staycations has become insignificant. With any clear predictability in the future, many hotels have been laying off staff and reducing operations, in some cases negatively impacting service standards.
Travel corridors with key markets such as Russia have been signed, however, less than 10% of Russians last year have opted for Dubai, most probably because of the Covid-19 testing – like most other foreign travellers, they need to present a negative test on arrival, take another test on arrival at Dubai Airport and quarantine up to 48 hrs which waiting for the test result.
Nevertheless, the process can even take less than 48 hrs and it has to be mentioned that most hotels have implemented comprehensive Covid-19 safety and hygiene measures, aimed at protecting both staff and guests. Authorities are reportedly being very proactive in enforcing these measures, some with weekly site inspection or even daily inspections
Occupancy at the operational (open) hotels averages 5% for city hotels and 15% for beach hotels. Compared to the same period last year, Dubai five star and luxury hotels boast rates which are at least 40% to 50% lower, November being known as a strong month ahead of the festive seasons. In spite of such dramatic performance, many of the hotels have remained ‘numb’ lacking innovation or any initiative, waiting probably for the Government to save them.
Over 50 five star hotels have remained closed (have not opened post pandemic) and 8 luxury properties are still closed. The only new opening has been the Sofitel Dubai The Obelisk, which opened late October. Some luxury properties have anticipated the lack of demand and opened on November 28th, right before the UAE National Day (Flag Day) which is expected to generate a boom of staycations, especially that most hotels are offering discounts of up to 50%.
CPP is reporting from Dubai, including the leading luxury hotels and resorts of the city. Hyatt, MELIA and TAJ are among the international hotel groups whose local properties are mostly five star, not luxury. Our coverage which is unfolding will include comprehensive 360 degree reviews including review of Covid measures, site inspections and exclusive interviews with local / regional hospitality leaders.
Oliver Petcu in Dubai
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