Experts see solid demand behind Dubai hotel surge

Dubai: Senior hospitality industry executives on Monday said Dubai's intensive hotel building activity is part of a "clear vision", and not a bubble that will burst one day.

Gerhard Hardick, chief operating officer of Roya International consultancy, said he believes "the bubble" would not implode but expand and result in a much larger tourism industry. "I believe we will live in a bigger bubble," he said, speaking at the Arabian Hotel Investment Conference.

He said people have been talking about a bubble for "more than 20 years", but the ongoing tourism projects are part of a "very clear vision".

Challenge

He said one of the challenges facing the hospitality industry in the region is to improve service standards, which have declined over the years.

About high hotel room rates in the city, he said it was a question of demand and supply, and when the hotels under construction are ready, prices will not collapse but they will "level out".

Daniel Hajjar, managing partner of Layia Hospitality, said it is important to focus on developing properties in the midscale and budget categories.

He said those who came up with the story of the Dubai bubble in the beginning "have no choice but to continue to push the same story."

Wadad Al Suwayeh, chief operating officer of multi-billion-dirham Oqyana project on The World cluster of islands, pointed out that occupancy level at Dubai hotels is 80 per cent and demand for rooms remains high. Oqyana's facilities include five hotels offering 1,500 rooms. The project is expected to be completed in 2011. "Dubai is a city built for tourism with no model to compare to," he said during a discussion on "the Dubai bubble".

Dubai has about 47,000 hotel rooms in 440 hotels and hotel apartments.

By 2016 their number is expected to grow to 554, with a room capacity of 127,000, according to the Department of Tourism and Commerce Marketing.

The Dh200-billion Bawadi in Dubailand is the biggest cluster of hotels being developed in the emirate. It will have some 60,000 rooms in 60 hotels.