Dubai’s hotel industry experiences a parallel boom – in makeovers for older properties

Dubai: Along with the new builds, some of Dubai’s existing hotels and resorts will be up for some major makeovers – and thus creating more opportunities for suppliers to the industry.

The Dubai-based Ishraq Hospitality is budgeting a sizeable investment over the next two years for the renovation of the group-owned Holiday Inn Express and Crowne Plaza Deira properties. “We plan to relaunch both properties, especially Crowne Plaza Deira, (which has been) a legacy destination in the neighbourhood,” said Richard Haddad, CEO of Ishraq.

“We also have a continuous property improvement plan, an ongoing project that looks into enhancing all our properties.”

Renovations to be the norm

Haddad said that existing hotels would have to invest heavily in renovation and refurbishment to compete against the 15,000 new rooms Dubai will add this year.

“We have to give our hotels a face life to stay ahead of the game,” he said.

The refurbishments would focus on three core elements: improving in-room and property-wide tech features (guests need superior Wi-Fi connectivity at all times as well as top-notch in-room entertainment), design, and sustainability.

“Guests are looking at lifestyle hotels,” said Haddad. “We cannot have plain, classical lobbies with basic design elements anymore. Hotels need to be sustainable as well.”

Hotel brands in Dubai are investing heavily in renovating legacy hotels, some of which are older than 10-15 years, to bring them up to existing industry standards. As Haddad said, they will need to be competitive with the new crop of hotels which will open in the years to come.

The older hotels will surely see renovations coming their way in the next five to seven years. “In six to seven years, we will not see a single scruffy hotel in Dubai,” said Philip Wooller, Area Director, Middle East and Africa for STR Inc.

Moreover, adoption of digital upgrades – whether as a service or an add-on - is also a must. “More than ever, hospitality organisations must adopt innovative digital solutions to better serve their guests and staff as well as be competitive and adaptable in a constantly changing and demanding market,” said Tariq Valani, Global SVP Support Services – Accor for Tech and Global SVP Technology - Fairmont.

The same is happening in multiple markets within the region.

According to US-based Lodging Econometrics, at least 123 new hotels with 30,113 rooms will open in the region this year. Next year, 116 hotels with 29,085 rooms are expected to open, with Saudi Arabia, the UAE, and Egypt the primary choices.

According to Christian Walter, Global CEO of PKF hospitality group, there has been a notable rise in well-funded real estate funds focusing on hospitality, including Blackstone Real Estate’s recent initiative.

“Blackstone’s $30.4 billion fund is the largest ever in the hospitality-centred category, and other financing vehicles like investor clubs are also emerging,” said Walter.

These opportunities in the UAE have attracted major players from regions such as the Middle East, Europe, the Far East, and the Americas.

“Dubai’s appeal as a global brand destination has attracted numerous non-Middle Eastern brands seeking to establish their presence,” said Walter. “Moreover, ownership structures have become more sophisticated, reflecting the industry’s evolving landscape.”

Investor sentiment

The UAE is now the number one ultra-luxury market in the world, outperforming traditional luxury markets such as Venice, Paris and London or New York. “I think this is a ‘golden era’ for the region’s hospitality industry, especially if you were to look at the growth rate of all the regional airlines,” said Wooller.

Hotels need a chic face-lift

The new crop of hotel guests is demanding more and more facilities that cater to ‘workcations’ and ‘bleisure’ holiday trends, combining business activities with resort-like elements. “The boundaries between work and vacation are becoming increasingly fluid, especially with younger generations,” said Walter.

This trend is shaping new hotel concepts and products, as urban hotels adopt features from resorts and leisure destinations, while traditional leisure destinations incorporate business-friendly attributes.