Dubai: There is more room for growth for mid-market and budget hotels, according to hospitality industry players at The Hotel Show in Dubai.
Investors are seeing serviced apartments, especially in the mid-market segment, in the UAE and Saudi Arabia as a low-risk and high yielding investment, according to Elie Milky, director of business development at The Rezidor Hotel Group, which operates hotel brands, such as Radisson Blu and Park Inn by Radisson.
“They cost less to develop and cost less to operate and less risky to recessions and downturns,” Milky said.
While there many four and five-star hotels, the region needs more mid-market and budget hotels, he said.
Dubai is estimated to account for “over 50 per cent” of five-star hotels in the Middle East, according to Russel Sharpe of Citymax Hotels.
In Dubai, entrepreneurs are building hotels on the suburbs, instead of key locations, because of the high land prices of land, Sharpe said.
Besides mid-market and budget hotels, other trends in the region’s hospitality industry include hotels within mixed-used developments, such as healthcare cities.
Dubai has the potential of becoming a leading medical tourism destination, such as Thailand and Singapore, said Raza Siddiqui, CEO of Arabian Healthcare Group.
He said that with the high-standard healthcare providers, this is possible.
Another trend is ‘green’ hotels that are trying to become more energy efficient, according to Johan Samuelsson of Trane in the Middle East and Africa.
He said that investing in energy efficiency could decrease operating costs for hotels.
