A Hong Kong-based hotel operator is counting on tourism demand for Dubai leading up to Expo 2020 to drive business at a former royal-owned estate in Ghantoot.
Swiss-Belhotel, which manages luxury and budget accommodations, in June took over the operations of the cavernous resort in the Abu Dhabi emirate close to Jebel Ali in Dubai, from a local operator. This is its first UAE property.
Built as a palace guesthouse for a member of the Abu Dhabi royal family and now leased by a Saudi national, the property is undergoing refurbishment to turn it into a four-star resort. The upgrades are expected to take another six months.
“We are adding around eight rooms, upgrading food and beverage [offerings], developing the beachside and pool area to make it a destination as it is becoming more popular with the excitement around the world trade fair in 2020, and the whole area is going to grow,” said Gavin Faull, the chairman and president of Swiss-Belhotel International. “The four-star market is underserved. Not everybody wants a five-star, and there is a market opportunity with the trade fair coming up.”
Formerly known as Cassells Ghantoot Hotel, it was managed by Five Continents Hotels and Resorts.
Dubai has a total of 69,948 rooms from 351 hotels, with the majority in the luxury and upmarket segments. In the pipeline are another 24,278 rooms from 83 hotels, mainly serving the same segment, according to STR Global.
“There will be a competitive reaction from the market [due to the supply] but not a glut because of the growth of airline traffic, the huge transit traffic, and the airport expansion,” Mr Faull said. “[Room rates] are strengthening and we are almost back to the pre-global financial crisis rates as demand is strong in Dubai.”
During the first half of the year, Dubai received a record 5.8 million tourists, but the rate of growth was 2.3 per cent, a considerable slowdown from the same period last year.
For the full year, occupancy is expected to be 77.4 per cent, down 3.3 per cent year-on-year, according to STR Global forecasts.
Dubai’s hotel room rates are among the most expensive in the world. The average daily rate this year is expected to touch Dh920.97, up by 5.7 per cent from last year.
Weekend room rates at the Ghantoot property now start at Dh226 a night according to its website, less than half of some nearby Dubai properties in Jebel Ali and the Green Community.
The 88-room Swiss-Belresort Ghantoot, located off the Dubai-Abu Dhabi motorway, is targeting Saudi Arabia, Germany and China as its major source markets. To drive its weekday occupancy, it is also marketing to business travellers and the events sector.
The expected first year occupancy rate is 60 per cent, according to Mr Faull.
Swiss-Belhotel is working with airlines, tour operators such as Alpha Tours, and e-commerce partners to drive up the visibility of the property.
It has 55 properties in operation and 70 more in the pipeline, including in Muscat, Riyadh, Doha and Erbil, Iraq expected next year.
In Kurdish Iraq’s Erbil, Swiss-Belhotel expects to open a 110-room greenfield property currently under construction in the next year despite the violence elsewhere in the country.
“The market may slow down a bit, but we are confident about it. There’s a lot of development going on in Erbil,” Mr Faull said. “The biggest solution to political instability is economic growth.”
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