Dubai to open new hotel rooms by thousands

Thousands of new hotel rooms are set to open in Dubai as stalled projects are revived by developers lured by the prospect of US$1,000-a-night (Dh3,673) room rates.

Several planned five-star developments were stopped midway through construction in the wake of the 2008 crash, but some are now being revived.

The additions could provide some relief to guests who are now paying the highest average daily room rates in the Middle East.

"We have been asked to pitch for a number of projects and there has been an increase in activity on The Palm and DIFC," said Stephen Flanagan, the director of professional services at Knight Frank, a global property consultancy. "We're getting back to 2007 and 2008 levels of activity which is very positive."

Hilton Hotels and Resorts is one of the groups in expansion mode with plans to open an additional 1,750 rooms in the UAE this year alone - more than 1,000 of them in Dubai. Essam Abouda, the group's vice president for operations in the Arabian Peninsula, said that while he believed the market had not yet reached the peak of the boom years, it was moving in that direction.

"Last year was a great year for us and we're very optimistic about the future of this market. What's great about Dubai is that it is diversified. There is a very wide geography of business staying in our hotels. Even within the leisure segment there are a lot of nationalities."

The Palm Jumeirah, where several hotel projects ground to a halt after the 2008 property crash, is among the locations that are now attracting increased interest from developers and operators.

Beachfront hotels that were offering bargain deals as recently as a year ago are now nearing full occupancy with telephones sales agents quoting between $800 and $1,200 when contacted yesterday.

The cheapest standard room available at Atlantis, The Palm tonight costs Dh2,628 without breakfast. The nearby Kempinski is fully booked tonight with the cheapest room for a stay tomorrow night priced at Dh4,560 including taxes, according to a reservations agent.

New hotels under development on the island include a Sofitel, an under construction project from the Al Habtoor Group and a Royal Amwaj hotel.

Nakheel, the master developer of the Palm Jumeirah, is "assessing some interesting new hotel designs", a spokesman confirmed yesterday.

It is also building its own hotel alongside the Nakheel Mall, a Dh2.5 billion retail and recreation facility on the Palm announced this month.

Elsewhere in the city, the Dh2.5bn fourth phase of Madinat Jumeirah, which will include a five-star hotel, is under way, while Al Habtoor is developing a second cluster of hotels on the site of the old Metropolitan.

Average room rates in Dubai have risen by almost 20 per cent to about Dh1,037 over the last two years, according to data from STR Global, the international hotel research company.

Despite the huge increase in room rates, Hilton's Mr Abouda believes that big spenders from emerging markets such as Brazil, India and Russia will sustain demand.

"If you look at visitors from Russia as an example, we are not talking about back-to-back charters," he said

Marriott International, which operates the world's tallest hotel in the city, plans to open a further 3,000 rooms in Dubai within the next two years.

It needs to hire 21,000 more staff to accommodate its regional growth over the next five years, said Alex Kyriakidis, the president and managing director of Marriott International this week.