What's at Stake this week?
February 12, 2023
Surprise, surprise! Bulgari Resort and Residences has registered a big sale last week, breaking its own record for the most expensive apartment sold back in 2022. The 3-bed apartment sold for AED 42.9M, equivalent to AED 13,543 per square foot (the highest price/sq.ft ever in Dubai!). The previous record resulted from an apartment sale with a value of AED 40M. Let’s take a look at some other takeaways from this week, shall we? 👇
Market Zoom: UAE
Have you added Dubai to your holiday getaway bucketlist?
If you haven’t, you should.
According to KPMG’s Dubai hospitality report, the UAE registered the highest occupancy rate in the Gulf last year. Dubai’s occupancy rates, in particular, performed similarly to cities like Instanbul (75% occ. rate), New York (74% occ.rate), and Paris (73% occ. rate), climbing to 72.5% in November 2022 from 64.7% in November 2021.
The report went on to declare that “the UAE now hosts one of the richest hospitality markets in the world with an expected 25% growth in the industry by 2030”. This growth is a result of the city’s positioning on the global stage as a thriving, safe environment for business travelers, tourists, and residents as well as a main destination for global events, great culinary experiences, and exploration. It goes without saying that investments to expand capacity is an essential factor too as the UAE hospitality sector has seen investments of around USD $32Bn thus far in an effort to acquire 48K more hotel rooms, bringing the total number of rooms to 200K. This ties perfectly into one of the main goals laid out in the UAE’s 2031 Tourism strategy: to attract 40M new visitors to the city of gold by 2031.
Based on its performance last year, Dubai’s International Airport was deemed the busiest airport worldwide, having received over 14M international visitors, a 97% increase YoY from the 7.28M tourist arrivals registered in 2021. A press release by the Dubai Media Office further highlighted that this achievement feeds directly into the Dubai Economic Agenda (D33), which aims to double the size of the emirate’s economy by 2033. Last year alone, Dubai’s tourism sector contributed USD $29.4Bn to the city’s economy, and the goal by 2031 is to increase the sector’s contribution to GDP to AED 450Bn.
Did you know? In 2022, Dubai was selected as one of 20 destinations globally under Airbnb’s Live and Work Anywhere initiative to identify the world’s most remote worker-friendly destinations.
From visitors’ point of view, KPMG surveys have shown that 92% of consumers would plan to stay in a hotel in Dubai again in the next year and 92% of residents are satisfied with their stay experience from over the last 12 months, indicating a 5% increase in customer satisfaction compared to 2021. This positive sentiment is further validated in TripAdvisor’s Travellers’ Choice Awards which, based on the reviews of millions of travelers, ranked Dubai as the world’s best destination for holidaymakers for the second year in a row, followed by Bali and London.
Dubai’s digital economy to grow over USD $140Bn
Dubai is once again pushing the boundaries of innovation and setting its sights on becoming a global leader in the digital economy space. The Dubai Chamber of Digital Economy, a subsidiary of Dubai Chambers, has released a comprehensive report in partnership with The Entrepreneur Middle East outlining its plans to drive the emirate’s digital ambitions forward.
At the heart of its strategy is the goal of strengthening the digital economy ecosystem in Dubai and achieving the objectives of the Dubai Economic Agenda (D33). This includes focusing on digital transformation, building a sustainable business sector, and adding an average of AED 100Bn per year to the economy. Raising awareness among the business community about the challenges and future trends in the digital economy is a key priority, as is highlighting the importance of digital transformation as a driver of sustainable growth for the business sector.
The report also outlines a range of initiatives aimed at achieving these goals which include “attracting 300 digital startups to the booming metropolitan hub by the end of 2024, bringing in 100 international experts in advanced technologies, improving laws and policies to support the growth of the digital economy, organizing an international conference on the new digital economy, promoting digital transformation among national companies, and enhancing the business environment to attract global digital firms”.
According to the estimates in the study, the national digital economy is set to grow to well over USD $140Bn by 2031, up from its current size of nearly USD $38Bn. This would firmly establish Dubai as one of the digital economy capitals of the world.
As the Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications, and chairman of Dubai Chamber of Digital Economy, Omar Sultan Al Olama, stated, “the goal of doubling the contribution of the digital economy to the UAE’s GDP from 9.7% to over 20% by 2031 is a reflection of Dubai’s ambition to be a key tech hub.”
The bottom line? Not only is the latest report from the Dubai Chamber of Digital Economy an exciting and ambitious step forward in the emirate’s journey toward becoming a leading player in the digital economy, but it also further reinforces the necessity to create a top-notch digital infrastructure that fuels digital transformation and sustainable business expansion.