Dubai set to add 28,000 hotel rooms by 2018: JLL

Dubai set to add 28,000 hotel rooms

Dubai: With hardly five years for Dubai to spruce up for the World Expo 2020, when the city is expected to receive 20 million visitors, hotel rooms in the emirate are projected to witness an exponential growth.

JLL, a leading real estate investment and advisory firm, said Dubai is set to see a massive increase of 28,000 new hotel rooms by 2018. This is a further surge of 7,000 rooms from JLL’s recent prediction of 21,000 new keys by 2017.

Already one of the world’s top holiday destinations, Dubai is currently gearing up for the World Expo with the government’s Tourism Vision forecasting 20 million visitors a year by the time of the event in 2020.

Statistics at the end of 2014 show that Dubai had 413 graded hotel establishments with a total of 65,000 rooms, up 3,500 compared to 2013. Supply has grown at five per cent per annum over the last five years. Total room supply is expected to grow 12.5 per cent per annum between 2015 and 2018. Preliminary 2014 estimates indicate nearly 12 million tourist arrivals in the emirate, registering an eight per cent growth over 2013.

“With mega-events Dubai World Expo 2020 and 2022 Fifa World Cup in Qatar and a host of major developments, including Al Habtoor City and Bluewaters Island, launching in coming years, hoteliers are preparing for the significant increase in tourists,” said Wajeed Bagwan, general manager of the newly launched Suba Hotel in Dubai.

“With over 3,000 new keys entering the Dubai market in 2015 alone, Suba Hotels intends to have an edge over competition with an increased offering and a focus on our unique selling point as Dubai’s first star boutique smart hotel with advanced technology facilities. We are planning to open three new Suba Hotels in the Middle East and Africa by 2017.”

PwC’s second Middle East hotel forecast warns that with so much new supply coming on stream across the region, the question is whether this upswing is sustainable in the future. “With over 54,000 rooms under construction and another 72,000 planned for the region, supply could well start to outstrip demand, putting ever greater pressure on both occupancy and ADR (average daily rate),” PwC said in a recent report.

According to data compiled by STR Global, a leading source of global hotel data, the Middle East and Africa region has reported negative year-over-year results in the three major performance metrics of hotel occupancy, revenue per available room (RevPAR) and ADR in April.

In the GCC, Doha was the only city to post a double-digit increase in ADR, up 12.3 per cent hitting $201.08. This was mainly because of an influx of visitor arrivals into Doha for the first quarter of 2015 related to GCC events in the market, it stated.

Despite the not-so-upbeat regional trend, Dubai is witnessing a boom in new hotel room supply. One of the world’s leading hotel groups, Starwood Hotels and Resorts, is planning to double its portfolio in the Middle East in the next five years, including the launch of its first W Hotel and St. Regis brands in Dubai by the end of 2015.

Alongside a new Westin, the three hotels will be located in the new Al Habtoor City complex, described by developers as the ‘world’s biggest residential and hospital development currently under construction’.

Dubai-based global luxury hotel company, Jumeirah Group, has two properties scheduled to open in Dubai by 2017, including the Jumeirah Al Naseem at Madinat Jumeirah and the first hotel under its lifestyle brand, Venu, opening off the coast of Dubai at the new Bluewaters Island. The Venu Bluewaters Island Hotel will offer close to 300 rooms surrounded by retail, residential and hospitality zones of the mixed-use Island, with the world’s largest Ferris wheel, the Dubai-I, at its heart.

Various existing hotels are going through major redevelopments and refurbishments to remain competitive. “Majid Al Futtaim, owning company of Novotel City Centre Deira, Ibis City Centre Deira and Suite Novotel Mall of Emirates, has allocated over Dh3.3 million as capital investment to support our green initiatives,” said Ramesh Bappoo, general manager of Novotel and ibis Deira City Centre and Delegate Hotels.