Arabian Travel Market: Emaar Hospitality to open 12 new hotels as tourism rebounds

The company plans to add five new hotels this year and seven in 2022, chief operating officer says

Stock picture of Emaar buildings in Dubai on April 29th, 2021. Chris Whiteoak / The National. 
Reporter: N/A for Business
Powered by automated translation

Emaar Hospitality is planning to open 12 new properties this year and next as it charts an expansion within the UAE and across new markets amid a recovery in tourism.

The hospitality arm of UAE's biggest property developer Emaar Properties expects a boost in business with the opening of Saudi Arabia's market after 14 months and the hosting of Expo 2020 in October, Mark Kirby, chief operating officer of Emaar Hospitality told The National on the sidelines of Arabian Travel Market on Monday.

“From international hotels perspective, the footprint is growing and we will continue to see that moving forward,” he said.

Our strategy is not to grow our portfolio substantially but to grow it organically

The addition of the new properties will expand Emaar Hospitality’s portfolio to more than 35 properties. However, the company is not rushing its growth and wants to establish its brand across key destinations, Mr Kirby said.

“Our strategy is not to grow our portfolio substantially but to grow it organically,” he said.

The hospitality industry was one of the worst hit by the coronavirus pandemic, which temporarily halted global travel last year and forced hotels and cruise ships to shut down for a period. However, an accelerated roll-out of vaccination programme have led to the establishment of travel corridors, which have in turn encouraged travel and tourism.

Emaar Hospitality currently operates hotels in the UAE, Egypt and Milan. It plans to enter Bahrain and Turkey where it will open new properties this year and it considering expanding operations in Saudi Arabia, Mr Kirby said.

The kingdom is an “extremely important” source market for Emaar hotels in the UAE, he said.

“Saudi Arabia is opening up today and we have solid business on the book from now until the end of the month … we have seen about 30 per cent of our business for the next 10 days coming from Saudi Arabia, which is reassuring that this market is starting to bounce back,” Mr Kirby said.

Emaar Hospitality owns about half of the properties in its portfolio and is focusing more on developing its hotel management business. That allows it to expand its brand to various markets. It currently does not have plans to sell properties it owns, but it is open to potential deals, Mr Kirby said.

“We got some incredible hotels that we continue to own and operate and anybody can come along with [an offer]” and it depends on whether that’s the right offer for the asset, he said.

In January, Emaar sold its 169-room Address Sky View hotel in Downtown Dubai for Dh750 million ($204m) to Evergreen Hospitality, which was "in line with the company's asset-light strategy for hospitality assets", it said a statement at the time.

In 2019, it sold five prime hotels – the Address Dubai Mall, Address Boulevard, Address Dubai Marina, Vida Downtown and Manzil Downtown hotels – with about 1,000 keys to Abu Dhabi National Hotels for Dh2.2 billion. Emaar Hospitality continues to manage these properties.

Emaar Hospitality had seen a strong bounce back in business across its portfolio of properties this year as government measures such as remote work visa and mass inoculation have boosted confidence.

“We have seen a very, very positive first quarter, much more than we expected and the second quarter is very much in line,’ Mr Kirby said.

In the fourth quarter, “we have Expo [2020] to look forward to … [and] there is potential to do some pretty solid occupancies”.

The average occupancy across Emaar Hospitality portfolio was about 55 per cent during the first three months of 2021 and its expects the rates to improve in the second half of the year as the tourism sector continues to recover.

“About 44 per cent of our business in Q1 came from the GCC, of which about 34 per cent alone was from the UAE,” boosted by domestic staycation business, he said. “Over the last year we’ve all learned how great the UAE is to be able to take staycations here,” he said.

The company has opened three new beach resorts in the past year and is opening another in Fujairah later this year to further capture the domestic tourism market.

“We have more staycation properties coming up … [growth in] domestic tourism, particularly for our group will continue."

The GCC remains the company's key source market, Mr Kirby said. However, it is now focusing on adding new markets including those in central Asia and the broader Middle East.

“Europe is also being relatively strong albeit certain parts because of lockdowns," he said.