Cop28: Hotels in Dubai say interest is rising ahead of key climate summit

Hotels in Dubai have noticed an early increase in interest for stays during the Cop28 summit.

With about eight months to go before the climate talks, which run from November 30 to December 12, hoteliers say it is still too early to gauge precise numbers but enquiries have increased and some hotels plan to run daily shuttle buses to the Cop28 venue at Expo City Dubai.

Prices have already surged by about 200 per cent at some hotels for the summit's opening night and hoteliers and hospitality experts are expecting a busy time.

“Since the news of Cop28 was announced, we have been receiving ongoing queries from delegations planning to attend,” said Robert El Khoury, vice president of sales and marketing at JA Resorts and Hotels.

“There has been much interest, particularly in our flagship property of JA The Resort as it is located just 15 minutes away from Expo City.

"The resort has confirmed bookings and we are planning to offer shuttle transportation during this period to provide further convenience for our guests."

Cop28 takes place at Expo City Dubai. Ruel Pableo / The National

Tens of thousands of people are expected in Dubai for the summit. World leaders, ministers, negotiators and climate advocates and activists from the front lines of the climate crisis will converge on the city for about a fortnight of intense talks at Expo City Dubai to galvanise global efforts to tackle the emergency.

The climate summit will also coincide with the UAE’s National Day celebrations on December 2, and, while there are still rooms across a wide range of prices available on hotel websites and aggregators such as Booking.com, interest is starting to rise. For example, on Friday a stay in Ibis Barsha for the opening night on November 30 starts at about Dh1,000 ($272) before taxes, while the rate for the week before is less than a third of the price at about Dh320.

Driving strong demand for rooms

Rove Hotels, which has nine properties in Dubai ― including one at the Cop28 venue that is already booked out for the duration of the summit on Booking.com ― said it was also seeing early interest.

“We have started to receive some enquiries for Cop28 across Rove Hotels nearest to the event site,” said Paul Bridger, chief operating officer of Rove Hotels.

“However, we expect demand to fully ramp up during the summer period. We are extremely excited about the upcoming event, it is an amazing opportunity for Dubai and the UAE, and we believe that it will drive very strong demand for hotels across all segments, from luxury five-star properties to mid-market.”

Paul Bridger, chief operating officer of Rove Hotels, said the group had noticed rising interest for stays during Cop28. One of its hotels is at the Expo City Dubai venue. Photo: Rove Hotels

It has already been a bumper few months for hotels across Dubai. In February it was reported that a packed events schedule and bustling tourism season has led to a 30 per cent price surge.

“While it is relatively early to anticipate exact trends, one thing is certain: the UAE’s hosting of Cop28 will prove one of the country’s most globally resonant events, and the arrival of delegates from around the world will provide a major opportunity for the hospitality industry,” said Jochem Jan Sleiffer, Hilton’s president for Middle East, Africa and Turkey.

“We are very excited at the prospect of welcoming Cop28 attendees in November, and are already gearing up across our UAE portfolio to prepare for their arrival as we put sustainability at the heart of our operations."

There are typically two main zones at Cop28 summits. The blue zone is off limits to the public and this is where the negotiations take place. The green zone, however, is usually open to the public. At Cop27 in Egypt last year, the green zone featured cafes and restaurants, booths displaying local sustainability initiatives and even areas for yoga.

Forecasting a busy time for Dubai

Sanjay Bhatia, managing director at investment banking advisory company Alpen Capital, said hotels were experiencing healthy occupancy levels on the back of the events season as well as a revival in tourism that had "eliminated any inhibitions of witnessing a situation of oversupply in the hospitality sector".

"The Cop28 summit, which is scheduled to take place during the peak tourist season of the country and expected to attract 80,000-plus, will push attendees of the summit and tourists to book much in advance to plan their visit to the country," said Mr Bhatia, whose company regularly releases hospitality reports for the GCC.

"The sector will also witness tie-ups between tour operators and hotels to facilitate ease of booking during this period of high demand. As a result, the hospitality sector in the UAE is expected to witness a rise in occupancy levels which will positively impact the sector."

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Cop28: Hotels in Dubai say interest is rising ahead of key climate summit

Some hotels plan to run daily shuttle buses to the conference venue

Driving strong demand for rooms

Forecasting a busy time for Dubai

20 stunning hotels coming to this Gulf in 2023 - in pictures

MATCH DETAILS