Dubai: InterContinental Hotels Group (IHG) said it is planning to grow its presence in the Middle East by nearly a third over the next few years, with 27 new hotels now in the development pipeline.
Pascal Gauvin, IHG’s managing director for India, the Middle East, and Africa, said the new hotels will mostly be located in the UAE and Saudi Arabia, and 70 per cent of the properties will be under the Holiday Inn and Holiday Inn Express brands.
“We have 12 hotels [in the pipeline] in the UAE and eight hotels in the pipeline in Saudi Arabia. These will take between three to five years. Some will come within a year or two, some will take three to five years,” Gauvin told reporters in Dubai on Wednesday.
IHG, whose brand portfolio includes the InterContinental, Crowne Plaza, Holiday Inn, and Kimpton Hotels, among others, currently operates 84 hotels across the Middle East. This amounts to 30,000 rooms in the region, just a fraction of the 800,000 rooms IHG has around the world.
Discussing performance in the UAE’s hospitality market where average room rates have seen a decline as supply outpaces demand, Gauvin said he was still confident on the long term.
“This business is a long-term business. When investors go into hotels, it’s an investment for the long term. There are always cycles in a city ... The positive thing is we have Expo 2020 coming, which will be a good driver for us and for the industry,” he said.
“Dubai grows an average of 4 per cent per year on arrival, and even if today supply is growing slightly higher [than demand], on the longer term, we are very confident to have a great RevPAR [revenue per available room].”
Management agreement
And to counter that slowdown in demand and in consumer spending, IHG is now developing more midscale hotels such as Holiday Inn and Holiday Inn Express in the UAE amid an oversupply of luxury hotels.
On Wednesday, IHG launched a new 504-room Holiday Inn hotel at Dubai Festival City, and signed another management agreement to open a Staybridge Suites property in the same area of the city.
The newly signed Staybrige Suites hotel will have 160 rooms and will house studios, one-bedroom units, and two- and three-bedroom units for visitors looking to stay in hotel apartments. The property marks the debut of the Staybridge brand in Dubai.
IHG’s Gauvin said he expected the brand to do well in the region, especially among GCC travellers who tend to travel with family and look for larger accommodation units.
