Dubai Holding plans land sale for mid-range hotels

Forty hotels with a total of 7,500 to 8,500 rooms are expected to be built on the 40 plots that Dubai Holding has identified across its Tecom business parks and Dubai Properties Group districts.
Above, Dubai Media City, one of Tecom's free zones. Silvia Razgova / The National
Above, Dubai Media City, one of Tecom's free zones. Silvia Razgova / The National

Dubai Holding has identified 40 plots across its Tecom business parks and Dubai Properties Group districts for the development of mid-range hotels.

Forty hotels with a total of 7,500 to 8,500 rooms are expected to be built on the plots.

Eighteen of the plots are located in Tecom parks and the rest across Dubai Properties Group areas.

Dubai Holding expects construction to start in 12 to 18 months, with the hotels opening in two or three years.

“These packages offer an excellent opportunity for Emirati small and medium businesses and entrepreneurs,” said Ahmad bin Byat, the chief executive of Dubai Holding.

The 40 new hotels will increase options for visitors in areas that currently have 14 three and four-star hotels and hotel apartments under brands such as Radisson Blu and Holiday Inn Express.

“Metro connectivity in these areas means these are attractive locations for mid-market hotels,” said John Podaras, a partner at Hotel Development Resources.

Dubai has been focusing on the growth of budget accommodation since winning its bid to host Expo 2020. The emirate’s measures include tax exemption for five years for four-star hotels, said Issam Kazim, the chief executive of Dubai’s Department of Tourism and Commerce Marketing.

The developers Emaar Properties and Meraas Holding announced last year that they would launch an affordable brand called Dubai Inn. Updates on this project are expected today.

Dubai now has 66 three-star hotels with about 9,000 rooms and 83 four-star hotels with 16,400 rooms. The five-star category has 77 hotels.

While Dubai Holding’s plot sale is targeted at investors, hotel operators are also keen to expand in this segment.

Starwood, which has traditionally focused on upscale brands for the UAE market, is looking to develop more budget accommodation.

“We are looking to double our midscale portfolio in the next three years,” said Neil George, a senior vice president for acquisitions and development in the region. “And we are looking to introduce brands that are not present here such as Element.”

Pascal Gauvin, the regional chief operating officer for InterContinental Hotels Group, said: “Dubai is fast developing southwards, and hotels in Tecom and DPG districts are well placed to service what is an increasingly exciting hub for business and leisure.”

A Ras Al Khaimah developer of mid-range resorts and hotels, Bin Majid Hotels and Resorts, has a 172-room property under development in Dubai Investment Park that is expected to open by the end of the year.

“We will go slow on the new plots release because we already are working on the DIP property,” said Ali Kasapbashi, the chief operating officer at Bin Majid. “We are looking to tap into the passengers to Dubai World Central, where I believe many of the airlines will move their operations to.”

Time Hotels, a Dubai operator of budget properties, said it would work with investors to look for projects in Tecom Investments.

“Tecom is the future and hotels there are doing not less than 85 per cent occupancy,” said Mohamed Awadalla, Time’s chief executive. The company has two properties in Tecom, one a four-star hotel and the other a hotel apartment.

Tecom Investments has nine free zones, including Dubai Internet City, Dubai Media City, Dubai Knowledge Village and DuBiotech.

Dubai Properties Group has projects such as Business Bay, Jumeirah Beach Residence and Dubailand.

ssahoo@thenational.ae

Published: May 5, 2014 04:00 AM

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