Luxury hotels in Dubai counting on Asian markets

Waldorf Astoria on Dubai's Palm Jumeirah expects to record growth in tourist numbers from China and India in 2017. Sarah Dea / The National

Luxury hotels in Dubai expect Asian source markets to keep them busy in 2017 despite a steady stream of rooms in the segment for the next five years.

About 6,300 rooms in the luxury segment are expected to open in the next five years in Dubai, adding to the 20,522 rooms already in the segment, according to the analytics company STR. And this is in addition to approximately 20,000 rooms in the pipeline at upper upscale and upscale properties, which include five-star and four-star hotels. There are about 40,000 rooms existing in the upper upscale and upscale segments in the emirate.

STR differentiates hotels based on actual average room rates. Luxury hotels are the most expensive, followed by upper upscale and upscale hotels.

“Dubai has always been a high-end market and [with the strong US dollar] people might shorten their stay but hotels have to be smarter in how they do business to attract and help them stay longer,” said Debrah Dhugga, the managing director of the five-star Dukes Dubai and Dukes London. The 273-room Dubai property opened on the Palm Jumeirah last week.

Room rates are expected to be steady this year at luxury hotels as demand is still there with a shortage of rooms in the segment, she said.

“Hotels can value-add their internal offerings such as discounts for food and beverage for their guests so that they can afford to spend when here,” Ms Dhugga said. “With the Expo 2020, there’s going to be a huge increase in business and in occupancy as more investments come in.”

The hotel expects to tap the UK tourism market, where the company has a presence, as well as the Asian markets such as the top-end leisure and corporate business from India, Saudi Arabia, China and Japan.

Waldorf Astoria on the Palm also expects to record growth in tourist numbers from China and India in 2017. Its current top source markets are the United Kingdom, the Arabian Gulf, Germany, Scandinavia and Benelux.

The growth from China is expected owing to the visa-on-arrival announcement in September for Chinese nationals, according to David Wilson, the general manager of Waldorf Astoria Dubai Palm Jumeirah.

Some of the major luxury openings in 2017 in Dubai include the 160-room St Regis Dubai Al Habtoor Polo Resort and Club in the first quarter, Viceroy Palm Jumeirah Dubai with 477 rooms and 221-room Viceroy Residences in March, and the 200-room Bulgari Resort and Residences in the fourth quarter.

“The Middle East is an important market for the luxury hospitality industry,” according to Hatem Chatter, the senior director for Middle East at the New York-based global hospitality consortium Leading Hotels of the World. “It definitely falls under the ‘grow’ category ... where despite the challenges, the market still continues to flourish and we are positive for 2017 as well.”

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