Why Dubai is a ‘rising giant’ of global hotel industry

Hospitality sector being reshaped by disruptions, changing consumer behaviour, new players

Last updated: September 21, 2020 | 16:15

2 MIN READ

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DOMESTIC TOURISTS: There was a time when the focus was on international tourists. Now, local tourists are able to rediscover the lap of luxury within their own backyard in the UAE. Pandemic-era sweeteners could mean that a five-star room could charge for under Dh500 a night (some from Dh299 or $81.50 per night), including access to facilities.

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REVITALISING HOTEL SECTOR: Guests and staff must wear masks. Social distancing must be observed. Lots of hand sanitisers all around. There are no buffet tables open yet (masked and gloves-wearing staff pick the food). Spa staff must wear masks. But other than these, many hotel properties in Dubai once again humming with guests as staycations have been the choice of necessity in the UAE.

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CLOSER TO HOME: Apart from the world's tallest building, the Burj Khalifa, Dubai is also home to almost 20% of the world's tallest real estate developments.

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FIVE-STAR EXPERIENCE: In the UAE, one can get into a car and drive to a remote resort in the middle of the desert, or to a beach resort that may even boast of exclusive water villas. Photo shows Bab Al Shams on Al Qudra Road, a 45-minute drive from the Dubai city.

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DOMESTIC TOURISM ALOFT: There are no hard and fast figures out yet. But circumstantial evidence shows the hotel sector is seeing, or is on the edge of, a revival.

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CHANGING LANDSCAPE: A recent report by professional services firm JLL urges tourism industry stakeholders to dig deeper into their imagination — to know the opportunities and grab them — amidst the changing landscape of hospitality globally.

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FEAR FACTOR WEARING OFF? Aviation and tourism account for more than 13 per cent of the UAE’s GDP, according to the International Air Transport Association (IATA). As the starts to see what appears to be the tail-end of the COVID-19 pandemic, with hopes running high for a vaccine (UAE approved on September 14, 2020 the vaccine for frontliners: https://gn24.ae/a7a977b140f7000) there’s a sense that the fear factor is wearing off. And Dubai’s hotel industry is once again seeing visitor inflows — mostly domestic tourists.

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NATURAL ANTI-DEPRESSANT? There’s one big plus factor in “experience marketing” aimed at domestic visitors. Getting people to see what they thought were “familiar” things — or places — that are always within arm’s reach, allows them to rediscover what many have ignored all along, and see the "familiar", but in a different light. In a way, it becomes a natural anti-depressant for both the local guests and thousands of hotel staff, who are once again getting busier..

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STAYCATION DEALS: Even in the midst of the pandemic, a growing domestic tourist segment has emerged. This helps keep the hospitality industry busy. At play are two key factors: simple messaging and experience marketing. Domestic tourists need to be told what’s on offer out there. Once that market knows they’re able to get a good-bang-for-their-buck, they’ll keep coming back for more, say industry experts.

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TARGETING DOMESTIC TOURISTS: Should hotels make it a practice to allocate a portion of their property to domestic tourists? The hospitality industry as a whole is making its move to do just that. But it’s a market-driven equation. With sweeteners offered — through discount coupons, technology-driven messaging and enticements — local residents are emerging as a solid base that’s keeping the hospitality industry alive and kicking.

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RISING GIANT: A scene in the Dubai Marina, known as the "Tallest Block in the world", with the majority of skyscrapers ranging between 250 meters to 300 metres. A recent JLL industry report counts Dubai as among the “rising giants” of hotel real estate investment, that are “maturing quickly”. The report notes that Dubai’s supply pipeline “continues to be among the largest in the world, representing 50 per cent of an already substantial market”, but that the pace of supply is having in impact on hotel performance despite increasing demand.

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LESSONS: A view from a resort property on the Palm Jumeirah, Dubai. The pandemic has shown there’s an untapped domestic crowd that could help keep hotels humming. The virus has down-regulated the years of “Dubai-is-only-for-international-visitors” messaging, and that a domestic market can help revitalise the industry.

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INVESTMENT IN HOSPITALITY: A resort in Dubai. Global giants account for half of all hotel real estate investment. They have deep concentrations of business and leisure activities and support a large and diverse leisure industry. The list of 9 “global giants” include Hong Kong, Las Vegas, London, Los Angeles, New York, Orlando, Paris, Tokyo, Washington DC. JLL lists Dubai as among the “rising giants”, alongside Bangkok, Beijing, Dubai, Guangzhou, Shanghai. Photo taken September 18, 2020.

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HOTEL RATES: Abdulnasser Alshaali, a UAE economist, stated that hotel rates did not drop to levels lower than those observed last year. In response to the virus-driven downturn, Alshaali proposes the removal of tourism-related taxes in hotel rates, even if only "experimentally" during the summer period, to help support the sector. Photo shows an early morning view of The Palm Jumeirah.

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