Dubai Deserts Luxury for Budget Hotels

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Budget Hotels to Steer Dubai Hospitality Sector

3-star The Dragon Mart Hotel from Nakheel, run by Accor opening in 2015.jpg

A new report published by Jones Lang LaSalle (JLL) today reveals that almost 50% of the 3,600 new hotel rooms to enter the Dubai market in the final months of 2015 have a 3-star or lower rating.

JLL report a current supply of almost 65,000 hotel rooms in Dubai in the first quarter of 2015, 44% are 5-star rated. Now, the near-saturated luxury market is set to be rivalled by a supply of lower-graded properties with more competitive room rates, 44% of which are forecast to be graded 3-star or less and a total 69% at 4-star or less.

“In the first quarter of 2015, only 29% of the current room supply is reported at 3-star or less,” commented Christine Davidson, Group Event Director of dmg events hospitality. “The new statistics revealed by JLL represent a significant shift for a market near dominated by 5-star-or-above rated hotels, including the only 7-star property in the world.”

Davidson continued: “Almost 4,000 new rooms entering the market this year will bring the supply of rooms in Dubai close to 70,000 in 2016. Dubai sets a high standard on the world-stage for development and innovation, and its hotel construction pipeline is currently prevalent in the MENA region and amongst the largest in the world. It is a contracts market, there is much business to be won here and we look forward to welcoming the 18K plus hospitality professionals who will travel to the region in September 2015 to find it for The Hotel Show and The Leisure Show.”

Laurent A. Voivenel, CEO of Dubai-based Hospitality Management Holdings (HMH), will be speaking at The Hotel Show’s Vision Conference 2015. He commented: “Dubai might be considered one of the most luxurious cities in the world, but hoteliers entering the market need to continue this trend and accelerate the development of budget room options to cater to demand from the growing middle classes, shorter-stay passengers travelling through Dubai International Airport, now the busiest in the world, and attract new travellers from the emerging economies of Africa and Asia. This is a smart choice for investors due to lower construction and operating costs and quick and high return on investment. At HMH we are penetrating this segment with our ECOS Hotels, introducing to the Dubai market in 2016 a ‘no frills’ B&B brand tying together a unique economical and green concept.”

Nakheel’s Hospitality and Leisure division plans to deliver a number of hotels in Dubai over the next three to five years.  Located at various locations across the emirate, including Palm Jumeirah, Deira Islands, Ibn Battuta Mall and Dragon City, the hotels range from 5-star, luxury properties to mid-market offerings. Among them are 5-star Palm Tower on Palm Jumeirah and a 4-star, all-inclusive beach resort at Deira Islands, to be developed through joint-venture with Spain’s RIU Hotels and Resorts.  Nakheel’s Ibn Battuta Mall will have two hotels, one of which will be managed by Premier Inn, with another two hotels at Dragon City, Nakheel’s rapidly developing Chinese trading hub.  The first, run by Accor under the Ibis Style Brand, is due to open this year.

Dubai’s appetite for luxury is still present as alongside the 5-star Palm Tower on Palm Jumeirah, some of the most luxurious properties the city has seen will open in coming years. 2015 openings include 5-star Palazzo Versace at Dubai Creek, movie-themed Paramount Hotel in Downtown, Starwood’s first St. Regis Dubai on Sheik Zayed Road, and the first Hard Rock Hotel in the Middle East in Marina 101, the second tallest building in the UAE behind the Burj Khalifa.

The Hotel Show Dubai will take place 28-30 September at the Dubai World Trade Centre, with over 650 international exhibitors showcasing technology, interiors, operating equipment, horeca and much more. Find out more:

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