Dubai: Starwood Hotels and Resorts Worldwide plans to open a hotel under its mid-scale brand Aloft in Dubai World Central (DWC) by 2018.
US-based Starwood is the latest hotel chain to secure a presence in DWC, where the Expo 2020, a six-month trade fair that is expected to attract 25 million visitors, will take place.
InterContinental Hotels Group (IHG) late last year signed an agreement with Abjar Hotels International to open a 450-room Holiday Inn and a 250-room Staybridge Suites there.
Jumeirah, Movenpick Hotels and Resorts, Marriott International, Accor and Rotana Hotels are some of the other companies eyeing the area.
The 150-room Aloft Dubai World Central, owned by Radar DWC, will be located at the entrance of Al Maktoum International Airport.
“It’s logical [to introduce Aloft in DWC]. I think our Alofts in general are in those types of locations. They are usually not in the heart of the city,” Guido De Wilde, senior vice president and regional director for the Middle East at Starwood, said in an interview on Tuesday.
Another Aloft hotel is expected to open near Dubai International Airport, joining an Element-branded property, with an opening date set for the first quarter of 2019. Two more properties under the same brands are due to open in 2018 near Dubai Maritime City.
Starwood introduced last month its tenth brand, Tribute Portfolio, which is made up of independent four-star hotels and resorts that are affiliated with the chain. The first Tribute Portfolio member is the Royal Palm South Beach Miami. It plans to roll out 100 hotels in the collection by 2020.
De Wilde said that the company is not currently planning to introduce Tribute to the Middle East.
“We will definitely evaluate opportunities for the brand in the Middle East,” he said.
He said that the company has not been approached by developers from the Middle East to join the collection.
Starwood is interested in taking Tribute to Dubai, where the three- and four-star segment is expanding, as well as Abu Dhabi, Saudi Arabia and Qatar.
The company plans to open 50 hotels in the Middle East by 2019, doubling its portfolio.
It has 10 hotels in the Dubai pipeline, with construction for six of those expected to start in the short term, according to De Wilde. By 2019, the total number of Starwood Hotels in Dubai is expected to reach 25.
“We will soon overtake New York as the destination with the most Starwood Hotels if we continue [growing] like this,” De Wilde said.
Asked about the performance of company’s hotels in Dubai so far this year, he said that occupancy in the first quarter grew by three per cent on the same period in 2014, while room rates were down, although he did not say by how much. Revenue increased, he said, but did not give a percentage.
Room rates in Dubai have been pressured this year amid an increase in hotel room supply, a drop in demand from markets like Russia and Europe and competition from cheaper regional destinations.
In March, occupancy in the emirate dropped 2.2 per cent to touch 85.7 per cent, while average room rates dropped 6 per cent to reach Dh978.69 year-on-year, according to data from research firm STR Global. This resulted in revenue per available room (an industry benchmark for performance) to decrease by 8 per cent to Dh838.69.
De Wilde expects room rates in Dubai to stabilise and then increase slowly in the coming years.
