November 29, 2023

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ATM 2023: Is Dubai’s lodge sector getting into a ‘golden age’ as extra initiatives prepare?

4 min read

Dubai: The lodge sector in Dubai is preparing for lots of motion – and it’s not solely about protecting the rooms and suites prepared to absorb extra visitors. There’s lots of motion taking place by way of new lodge initiatives being delivered, in what trade sources say could possibly be the ‘subsequent golden age’ for the trade.

* A 1,000-room lodge – and what would be the world’s tallest such – opening in first-half 2024. Situated in Dubai Marina, the 365-metre excessive ‘Ciel’ is from The First Group, who’s been busy via the years with constructing lodges within the metropolis. (By the best way, Dubai already hosts the world’s tallest lodge towers.)

* Earlier than Ciel’s opening, one other record-holder, the One Za’abeel can have its lodge tower prepared underneath the ‘One&Solely’ super-luxury branding by year-end. (The mission will get its place within the Guinness World data courtesy of getting the tallest cantilever.)

* And only recently, there was the Atlantis the Royal changing into Dubai’s newest’s vacation spot resort, with fairly a novel tackle its structure design and with the elevated vary of experiences related to the identify.

So, how briskly can Dubai construct new lodges? And equally essential, how quickly can the hospitality market take in all the new rooms?

“Dubai has reached vital mass – Model Dubai is well-established and extremely wanted,” stated Faisal Durrani, Accomplice and Head of Center East Analysis on the consultancy Knight Frank. “Dubai boasts amongst the best focus of lodge rooms on the earth at 140,000 keys – and extremely, occupancy ranges are additionally routinely world-leading.

“Dubai Airport too is now on target to surpass pre-Covid ranges, cementing its place for 15 years operating because the world’s busiest worldwide hub.”

The UAE lodge market is well-placed to welcome new hospitality ideas. For instance, the 25hour Lodge Dubai One Central attracts big crowds with its distinctive worth proposition. It’s in contrast to a conventional lodge, but it has gained reputation amongst residents and guests alike

– Nils Heckscher of PKF hospitality group

On high of these 140,000 rooms, round 36,000 new ones are deliberate or underneath building. As is to be anticipated, nearly all of these are within the five-star metropolis lodge/resort class, with Dubai South and Expo Metropolis more likely to see extra of them as they emerge as mixed-use hotspots.

Heading in direction of a Q2-2024 opening day. That is the standing for the Ciel lodge tower in Dubai Marina, which is able to create one other 1,000 lodge rooms within the metropolis.
Picture Credit score: Ahmed Ramzan/Gulf Information

Construct and meet immediate demand

Builders of lodges are hoping that this demand – whether or not for enterprise or pleasure – in Dubai stays on for a lot longer than the common market cycles. That is the place geopolitics – and the way it’s enjoying out nowadays – might assist them.

“Truthful to say that the worldwide geo-political state of affairs has given the UAE, and extra particularly Dubai, an unimaginable enhance to the economic system in just about each sector throughout the board,” stated Philip Wooller, Space Director, Center East and Africa at hospitality consultancy STR.

“Regardless that lodge provide elevated by 25,000 rooms since 2019 (and 36,500 since 2018), demand has stored tempo.

“Dubai is presently the preferred metropolis on the earth and the lodge performances verify this. 12 months-to-date occupancies are simply over 83 per cent with common room charges (ARR) at near Dh800 and stronger than in New York, London and Paris.”

All this ‘regardless of having by far the most important new provide will increase within the final three to 4 years’, Wooller added.

There’s nonetheless a robust window of alternative for lodges within the 3-star and under class, significantly on condition that 84% of upcoming provide is both 4- or 5-star in Dubai

– Faisal Durrani of Knight Frank

‘Serviced’ residences too assist

Launch a lodge – and add a residential aspect to it. Convey all the things underneath a single well-liked hospitality model. Yet another factor – launch offplan for the residences.

This has been the formulation builders in Dubai and more and more so in different emirates are deploying. Whether or not it’s a Fairmont, One&Solely or St. Regis, such associations assist. Particularly when there’s a lot competitors for the worldwide buyers’ curiosity and funds.

For builders, it’s additionally an opportunity to lift funds to assist via the mission building. Offplan gross sales additionally drive optimum visibility out there. Executed effectively, the residential gross sales assist scale back the payback interval for builders than what they will count on in a standalone lodge mission.

“It’s encouraging to see the diversification of the market that’s going down, together with the serviced and micro-apartment segments,” stated Nils Heckscher, Managing Director, Head of Africa and Center East, PKF hospitality group.

“Blended-used developments and serviced dwelling ideas are gaining reputation among the many ‘digital nomad’ inhabitants thronging into the UAE. You even have branded residences, two manufacturers of lodges in the identical constructing, and lodges which have residential flats rising in reputation.

“This rising digital nomad inhabitants needs a small kitchenette of their lodge rooms, for instance. The ‘workcation’ pattern can also be rising in reputation.”

Dubai’s lodge builders will likely be being attentive to all traits, present and new ones within the making. If every of those traits can preserve the rally in lodges’ increase instances, why not?

– With inputs from Dhanusha Gokulan, Chief Reporter

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