Dubai: Hyatt Hotels and Resorts said it will expand its portfolio in the Middle East and Africa region over the next two years.
The Chicago-based hotel chain plans to add 14 hotels by 2018, bringing the total number of properties in the region to 31, said Christian Pertl, its vice president of sales operations for the region, in an interview on Monday.
Three of the hotels will open in the UAE, including a Grand Hyatt in Abu Dhabi by the end of this year and two Hyatt Place-branded properties in Dubai. Pertl said the company is in talks to open another Dubai hotel.
In Dubai, Hyatt will focus on opening properties in the three- and four-star segment, where it sees the biggest opportunity, he said.
“Dubai has always been a destination for luxury hotels. But in the last two to three years, the key global operators have been focusing on bringing the limited service brands [in the three- and four-star segment] to the destination. It has proven to be very successful. There’s also a big focus from the government to make sure there are a variety of brands available, not only five-star luxury,” he said.
Dubai is encouraging developers to build more three- and four-star hotels, which are popular with families and business travellers. It plans to nearly double the number of hotel rooms as it targets 20 million visitors per year by 2020.
On how the company is increasing its market share in the UAE, Pertl said: “We are extending our portfolio and we are focusing a lot on customer service.”
“When you see that there’s a lot of new supply coming into the market, it’s a challenge for every operator to make sure that they get their fair share,” he added.
Around 20,000 hotel rooms are expected to enter the Dubai market this year. The increasing supply has lowered room rates and put pressure on hotels’ profitability over the last year.
“The challenge in Dubai is the rates. That’s what everyone is experiencing,” Pertl said.
Also, occupancy levels have been lower in Dubai in the past year. Hyatt’s occupancy rates in the emirate were “in the high 80s” in the first quarter of this year, flat compared to the same period in 2015, Pertl said.
Hyatt’s pipeline also includes a Hyatt Regency in Riyadh, which is scheduled to open by the end of this year, as well as a Park Hyatt, Hyatt Residences and Hyatt Centric in Doha, due to open by 2018.
The boutique hotel brand Hyatt Centric will be making its debut in the region when it opens in Doha. Pertl said he expects the brand to do well in the UAE, adding that the company looks to expand it in the region.
“It is a lifestyle brand for a younger crowd,” he said.
Hyatt operates 640 hotels globally.
