Starwood aims for another dozen hotels in UAE

The pool area at Le Meridien Al Aqah Beach Resort in Fujairah. Randi Sokoloff / The National

Starwood plans to add a dozen new hotels in the UAE after relocating 200 of its top brass to Dubai for a month.

The group, which operates the Sheraton and Le Meridien hotel brands, has been running its global operations from Dubai since March 4 - some 11,300 kilometres from its permanent headquarters outside New York City.

It follows a similar temporary relocation to China in 2011 as it seeks out growth from emerging markets.

The move by one of the world's largest operators comes as hospitality groups cash in on record occupancy levels in Dubai that have sent room rates soaring and encouraged developers to restart stalled projects.

"Dubai epitomises the changing face of travel," said Frits van Paasschen, the chief executive of Starwood Hotels and Resorts Worldwide. "With 80 per cent of Starwood's pipeline coming from rapidly growing markets, it is simply not possible to lead a truly global business from a boardroom in Connecticut."

Starwood wants to open 50 new hotels in the region over the next five years, adding more than 14,000 rooms.

Global hotel operators are building thousands of new hotel rooms throughout the country as airlines such as Emirates and Etihad attract rising numbers of passengers breaking their journeys in the UAE on long-haul flights.

Abu Dhabi International Airport recorded an 18.9 per cent increase in passengers last year as 14.7 million people passed through the terminal.

At the same time, Dubai International Airport overtook Hong Kong to become the world's third-busiest ranked by international passenger numbers. Passenger traffic through Dubai grew 13.2 per cent to 57.6 million last year.

Such growth is compelling for hotel companies that face increasing economic headwinds in many developed markets as holidaymakers economise and companies pare back business travel.

Starwood expects to grow its UAE portfolio by 60 per cent with the addition of 12 new properties - half of which will be in Dubai. That would take its total tally of hotels in the country to more than 30.

It also plans to open a second St Regis Hotels and Resorts brand in Abu Dhabi on the Corniche - making it the only city in the world with two St Regis-branded hotels.

Starwood is hosting an investor presentation in Dubai today as it reveals its latest expansion plans for the region.

The UAE has the most competitive travel and tourism industry in the region, according to the 2013 World Economic Forum Travel and Tourism Competitiveness Report. It has jumped two places to 28th position globally.

"Perhaps the most important advantage of UAE travel and tourism competitiveness relates to its world-class international hubs for travel," said the report.

But it also noted that hotel prices were "somewhat high" by international standards.