Plans for thousands of new hotel rooms are set to be announced as the region’s biggest travel industry event opens in Dubai today.
Government spending on infrastructure in the UAE and a major privatisation push in Saudi Arabia is stoking interest from international hotel operators and investors even amid slowing regional economies.
The Arabian Travel Market will open against a backdrop of upheaval across regional economies hit by a weak oil price looking to boost revenue from tourism.
“Comparatively speaking, investor sentiment has been cautious this year, which is slowing down the development process, mostly among the smaller private investors,” said John Podaras, a partner at the hospitality consultancy Hotel Development Resources in Dubai. “This is a result of external factors such as the continuing low oil prices and regional conflict and the resulting reduction of fluidity in the market.”
Dubai is still the region’s largest tourism market and many of the projects featured at this year’s event are being developed to meet the requirements of Expo2020.
There is also more appetite for mid-range hotels in the UAE.
“This has been identified as both an underdeveloped and potential growth area for the region, driven by demand from the growing middle-class markets such as China, India and Africa combined with budget Generation Y travellers and young families,” said Nadege Noblet-Segers, the exhibition manager at Arabian Travel Market (ATM).
The four-day, 23rd edition of the travel trade fair at the Dubai International Convention and Exhibition Centre is expected to draw more than 26,000 visitors and 2,800 exhibitors this year.
Last year, the exhibition reported 27,138 visitors, a 15 per cent increase over the previous year, and 3,285 exhibitors – up by almost a fifth.
Marriott expects to open its Renaissance Downtown Hotel, Dubai, a 298-room luxury property, at the end of this year.
Cloud 7, which is owned by Kerten Turkey Group, plans to open one mid-market property in Dubai by the end of this year. Kerten is the majority shareholder behind Turkey’s The House Hotel Collection.
Based in France, Louvre Hotels Group expects to open 10 hotels in the UAE, 20 in Saudi Arabia and five in Oman over the next five years under its budget and economy brands such as Royal Tulip and Golden Tulip.
The group is owned by Shanghai’s Jin Jiang International, a holding company. The average size of each hotel is 150 rooms.
Chicago’s Hyatt Hotels and Resorts plans to open two mid-market Hyatt Place properties in Deira with 150 to 200 rooms each by the end of 2018.
“The problem is not necessarily occupancy, but the challenge is in the rates. But the theme parks and Expo2020 will drive additional demand,” said Christian Pertl, the vice president of sales operations for the Middle East and Africa at Hyatt International.
Hyatt expects to open the five-star Grand Hyatt Abu Dhabi Hotels and Residences Emirates Pearl in the fourth quarter with 428 rooms and 60 residences on the Corniche this year.
Millennium & Copthorne, which expects to open its five-star 677-room Bab Al Qasr in Abu Dhabi in the fourth quarter, is also developing the mid-market Studio M brand in Dubai.
It aims to open its 144-room Studio M Al Barsha next year, while another near Dubai World Central with 750 rooms is expected to be one of the largest budget hotels in the region when it is due to open in 2018.
“We know the plan to divert a lot of airlines to DWC and we will see much more demand from airlines,” said Francois Kassab, the chief operating officer at Millennium & Copthorne for the Middle East and Africa. “Moreover, the new parks in Dubai due to open will drive demand to this part of the city.”
In Saudi Arabia, hotel operators are lining up more signings. Swiss-Belhotel International expects to open one in Riyadh and another in Makkah this year. A four-star property in Al Khobar, Saudi Arabia, is expected next year.
Abu Dhabi’s Rotana will open five new hotels this year in Saudi Arabia, among which four accounting for 1,000 rooms will be under the affordable Centro by Rotana brand.
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