Starwood's officials aim to get grass-roots view of Dubai tourism

Dubai: Frits van Paasschen, chief executive of Starwood Hotels & Resorts, will need his sunglasses for his next relocation.

Paasschen, together with more than a dozen of the US company's executives, will be based in Dubai for a month next year, a far cry from the company's headquarters in Stamford, Connecticut. The team will hope to get to grips with Starwood's ambitious goals in the Middle East, where it plans to expand its business 60 per cent in the coming five years.

Despite political unrest across the region, hoteliers are optimistic they can make good returns as room rates remain higher across the Gulf than in Europe. That optimism is reflected in Starwood management's month-long regional immersion — the second such trip after a similar spell in Beijing in 2011.

"The best way to learn about a place is to buy groceries there… not just a week of whistle-stop visits," Paasschen said in interview at Grosvenor House.

The move will help the management understand the implications of "extreme growth" in the region, he says.

Global tourism hub

Despite a boom in hotel construction over the past decade, occupancy rates in March were above 80 per cent in Abu Dhabi and Dubai, according to data from Ernst & Young.

The same went for three cities in Saudi Arabia — Makkah, Madinah and Jeddah — as well as the Omani capital Muscat.

Dubai, where occupancy rates increased year-on-year despite an increase in average room prices and supply of available rooms, was singled out by the consultancy.

"These numbers represent milestones in the story of the growth of Dubai as a global tourism hub," said Yousuf Wahbeh, Ernst & Young's head of transaction real estate for the region, in comments alongside the release of the March figures.

"It is unlikely that we will see monthly hospitality sector numbers decline this year and they are likely to form the basis of growth for the coming years."

Starwood has a portfolio of 70 hotels in the Middle East and north Africa, with 40 new hotels in the pipeline. Its regional links date to 1966, with the opening of the Sheraton in Kuwait City.

— Financial Times