India's Taj ready for more hotels in UAE as it eyes 80% plus occupancy at its 3 Dubai properties
Its 3 hotels in Dubai are targeting over 80% occupancy in Q4-24's peak season
Dubai: The operator of Taj hotels is ready to add locations in the other emirates and build on the three properties it manages in Dubai, including one on the Palm Jumeirah.
“Abu Dhabi can have at least one Taj hotel, (maybe) a resort in Yas Island,” said Saurabh Tiwari, Area Director of Middle East and CIS at Indian Hotels Company Ltd., part of the Tata conglomerate. “Sharjah has a cricket stadium, making it a huge potential for sports tourism. We should have a hotel in RAK, Ajman and Sharjah.”
The existing three Taj hotels in Dubai are the 296-room Taj Dubai in Business Bay, the 325-room Taj Exotica Resort & Spa on the Palm, and a 200-room Taj JLT. “Dubai can have at least two to three more hotels, including a Taj Vivanta,” said Tiwari. (Apart from the Taj and Vivanta, the company also operates the midmarket ‘Gateway’ brand.)
The intent is go bigger in markets with a strong Indian diaspora, solid airline connectivity, and status as key trade hubs, thus aligning its growth with demand drivers. Clearly, the UAE meets all those requirements for super-charged growth if more Taj hotels open.
Regional expansion
Tiwari said the company is well-placed to enter Doha and Kuwait City. The group has ambitions for adding more in Saudi Arabia, where it currently has two.
“Two is a good start in Saudi Arabia - however, we could have one more in Riyadh,” said Tiwari. “AlKhobar is something that excites me as well. I would aim for five properties in Saudi Arabia in time for Neom City’s first phase launch.”
In August, the company launched two Taj hotels in Bahrain –a 251-room hotel in Hamala and a 200-room property in Downtown Seef Manama. These made IHCL the first Indian hospitality company to establish a presence in Bahrain.
Scaling strategy
Indian Hotels Company is aligning its expansion with a growing airline connectivity from India, which a key factor in choosing new hotel destinations. This is where Tata’s ownership of Air India comes in handy, which it bought back from the Indian government in 2022.
“Air India has changed the game recently with multiple direct flights from US cities like New York, leading to a surge in American tourism,” said Tiwari.
Recruitment plans
IHCL employs around 1,000 staff in the UAE, swelling to 1,200 during peak winter seasons. Over the next three years, the group expects to hire up to 4,000 more employees across Bahrain, Saudi Arabia, and the UAE.
“With each new hotel launch, we anticipate adding 300-400 employees per property, depending on size,” said Tiwari. “For example, a 600-room property could bring an additional 600-800 employees, following the 1:1.5 staff-to-room ratio,” said Tiwari.
Will hotel rates rise?
In Q4-2024, despite increased competition, it aims to match last year’s 85% occupancy rate at its Dubai hotels.
“We’re comfortable maintaining last year’s numbers given the market conditions,” said Tiwari. “But the sheer volume of new properties will impact the balance of supply and demand.”
In prime areas like Business Bay, average daily rates hover around Dh900, while properties like Taj Exotica command rates between Dh650 and Dh1,400.
Tiwari acknowledged that geopolitical tensions have hampered growth. “We could have done significantly better without the ongoing conflicts. War impacts everyone.
“Though an influx of Russian businesses has provided some lift, the broader impact of geopolitical instability has been negative.”