Hospitality sector portends favourable tidings for Dubai

Dubai: With Dubai standing out as an oasis of tranquillity against the general turmoil in the Middle East, the increased tourist inflows highlight the long-term potential of adding new hospitality projects to an already well-established stock.

The city has attracted demand from leisure, corporate and MICE travellers, with the leisure market contributing over 40 per cent of total room nights. The Dubai Statistics Centre revealed that tourism and trade are set to push the economy to its biggest expansion in five years.

Dubai’s prime retail and hospitality sectors performed well last year and are well placed for 2013. During October, Dubai was among the three top markets in the region to achieve double-digit RevPAR growth with a 20.4 per cent increase. Hotel occupancy rates were reported at 75 per cent during the same period. This is set to continue with many international events planned in the emirate in addition to the annual shopping festivals.

Current capacity is estimated at 40,943 hotel rooms and 17,204 hotel apartment rooms. Major openings in 2011 included Ritz-Carlton DIFC, Jumeirah Zabeel Saray and Millennium Plaza on Shaikh Zayed Road. Last year, there was the JW Marriott Marquis, touted as the world’s tallest dedicated hotel.

Dubai can expect double-digit growth this year even as the Middle East and Africa markets prepare to add 150 new hotels in 2014. With nearly 17,000 rooms in the pipeline, occupancy is set to rise by 28.6 per cent.

A couple of factors can easily be attributed for the projected gains in Dubai’s tourist numbers, including the significantly higher inflow from China and Russia. New routes flown by Emirates and Etihad helped, as did the Arab Spring and Syria’s civil war in diverting tourists to the safe haven that is the UAE.

In addition, a tourism push by Dubai’s planned theme parks is expected to generate as much as $1 billion and attract 10 million visitors each year. These include Universal Studios in Mohammad Bin Rashid (MBR) City, while five theme parks are to be developed by Meraas.

Dubai is also aiming at a larger share of the international convention and exhibition business by targeting multinational pharmaceutical firms, banks and consultants who typically host conferences in a different city each year. Dubai has already established a considerable reputation in this regard.

In 2011, it hosted 34 international association meetings, not taking into account corporate meetings, incentives and exhibitions. In 2013, the emirate will roll the red carpet for the Inter-disciplinary World Congress on Low Back and Pelvic Pain, the Society for Worldwide Interbank Financial Telecommunication Congress & Exhibition, and the International Destination Expo 2013.

An Economic Impact Assessment report by Oxford Economics revealed that the spend associated with events at the Dubai World Trade Centre (DWTC) in 2011 contributed Dh6.5 billion towards Dubai’s economy in 2011, equivalent to 2.1 per cent of the GDP.

New hospitality brands are rushing to the emirate. Of the 113 announced hospitality projects set to come online in the UAE in the next three years, 34 are first-timers to the country and include Waldorf Astoria, St. Regis and W Hotels.

Older hotels in Dubai are fast-tracking refurbishment plans amid increased competition from the new. Several, including the iconic Jumeirah Beach Hotel, are utilising the quieter summer months to embark on extensive refurbishment programmes.

Jumeirah Group, which operates five properties in the emirate, is refurbishing two of its landmark properties — Burj Al Arab and Jumeirah Beach Hotel. Le Méridien Mina Seyahi is in the midst of its own refurbishment, which will see the hotel closed for eight months. Other hotel refurbishments include Dusit Thani Dubai, expected to be completed by September, and Deira City Centre, which is being upgraded to incorporate a Pullman Hotel.

— The writer is the country manager - UAE at Chesterton International.