The group behind one of the biggest hotels planned for Abu Dhabi expects room rates in the capital to rise despite the addition of almost 5,000 new rooms by the end of next year.
The 677-room Millennium Bab Al Qasr will be one of the largest hotels in the city when it opens near the Corniche in the second quarter of next year.
“The hotels sector is preparing for the upcoming expansion of Abu Dhabi, and you will see an upswing in the average room rates in the next two to three years,” said Ali Hamad Lakhraim Alzaabi, the chief executive of Millennium and Copthorne Hotels Middle East and Africa.
The company also plans an additional 218 rooms as part of the upscale Biltmore Bateen Marina Abu Dhabi in 2016. The company manages the 586-room Grand Millennium Al Wahda hotel, which also has 258 hotel apartments.
Despite the spike in new hotel rooms being completed, Mr Alzaabi is not worried about an oversupply.
“It takes five years to build a hotel, and we can’t wait for the airlines to expand [and bring in more guests],” he said. “These hotels will do well once the airport expands and Yas and Saadiyat islands are in place.”
About 4,693 rooms are set to come on stream in Abu Dhabi between this year and the next, PwC estimates. Among them are the Courtyard by Marriott Abu Dhabi Central Market, the Abu Dhabi Marriott Hotel and the Marriott Executive Apartments. The capital has 150 hotels and hotel apartments.
While Dubai’s average room rates are expected to touch US$266.90 next year from $254.90 currently, Abu Dhabi is expected to reach $154.60 from $151.90, according to the PwC.
“You can’t compare Dubai with Abu Dhabi, because Dubai started 20 years earlier in promoting itself and with the airline,” Mr Alzaabi said.
Millennium and Copthorne expects to have 20 hotels in the UAE, up from eight, by 2017. It will also open a Millennium Hotel in the Georgian capital, Tbilisi, in 2018.
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