Property developers in Ras Al Khaimah are increasingly focusing on hotel development rather than building homesas the property market remains depressed in the emirate.
Projects under way include a Dh500 million (US$136.1m) resort being developed by RAK Hospitalitythat is scheduled to open this year under the management of the Turkish operator Rixos, and a Waldorf Astoria hotel, one of Hilton's luxury brands, which is being built by Al Hamra Group.
The Waldorf Astoria hotel, which will be the first in the UAE under the luxury name, is expected to open in the first quarter of next year.
"Commercially as a group, our strategy needs to evolve according to market conditions. Like everywhere else, property is taking a bit of a beating," said Mark Hawkes, the group chief financial officer for Al Hamra, which is based in Ras Al Khaimah.
"We're expanding in the areas where we've identified growth. Tourism in Ras Al Khaimah is growing," Mr Hawkes said.
The number of visitors to the emirate reached 835,000 last year, up from about 500,000 in 2010.
Authorities at the Ras Al Khaimah Tourism Development Authority hope that tourism will comprise 20 per cent of the emirate's economy by 2021 and generate in excess of $1bn a year.
The emirate is aiming to attract at least 1.2 million visitors starting from next year. Ras Al Khaimah has about 3,500 rooms under development or already open and is aiming to have 10,000 hotel rooms by 2016, according to figures from the authority.
Plans to develop a $1 billion "Real Madrid" resort in the emirate were announced by the Ras Al Khaimah Investment Authoritythis year, with funding expected to be raised through foreign investment.
"Ras Al Khaimah is moving ahead with its strategy of strengthening its position as a tourism destination in its own right," said Chiheb ben Mahmoud, the head of hotel advisory at Jones Lang LaSalle Hotels, Middle East and Africa.
"You would be expecting limited demand or interest for residential in [Ras AL Khaimah] at the moment. The reason that market grew in 2008 and 2009 was as a dormitory settlement for Dubai," he said. "The adjustment in prices, particularly in Dubai, has obviously impacted on that, and there has been a significant flow of people from the Northern Emirates into Dubai as the prices have fallen.
"That has obviously limited the demand for property in Ras Al Khaimah."
Al Hamra initially planned to manage directly the property that is to become a Waldorf Astoria. But it is moving away from hotel management, which it says is not part of its "core business".
Having a global brand also helps to bring in more guests, Mr Hawkes said. "The hotel has gone through a number of design changes," he added. "It was originally planned to be owner-operated - in other words we would operate it ourselves.
"The decision was then taken about two years ago to bring in an international operator and have it branded. This has delayed it, because we then have to comply with their international standards."
Other projects on which Al Hamra is focusing include a renovation of Al Hamra Fort Hotel, which will also be managed by Hilton, and it is expanding Al Hamra Mall. The company plans to start renovating the Fort hotel within the next month or so, with about a year required for completion.
Al Hamra said that it had finished building what it started in terms of home developments but that some of the property development that was planned was put on hold.
"Having said that, we're not completely moving away from real estate either," Mr Hawkes said.
"We have got some areas of our village which have not yet been developed, which have been earmarked for future projects, and we're still exploring those and the right time to launch.
"We're just assessing the market and deciding when the right time will be to actually add more inventory to the market here in Ras Al Khaimah."
