April 16, 2018
Many hotel companies also see Saudi Arabia as the next big opportunity
Dubai: While the demand for luxury still persists, hotel companies are increasingly eyeing opportunities in the mid-market segment.
This year alone, both Emaar and Jumeirah have announced close to 10 new, middle-market hotels. On the other hand, as reflected in the news on Sunday, Meraas plans to open the luxurious Caesars Palace in Dubai, the first one outside of Las Vegas, towards the end of the year.
Hoteliers from around the world would be discussing the dynamics of the hospitality sector in the Middle East over three days of the Arabian Hotel Investment Conference (Ahic) which kicks off on Tuesday.
Traditionally having been hosted in Dubai, this year’s conference will be held in a purpose-built venue in Ras Al Khaimah for the first time. The event is expected to attract hoteliers, investment firms, and technology companies, all of whom are looking to take part in the region’s ongoing hotel boom.
In Dubai, much of this growth has been driven by the government’s desire to welcome 20 million visitors by 2020, a figure that would require an increase in hotel rooms over the next two years.
A consequence of this ambitious goal has been a strong push by traditionally luxury players in to three-star hotels, including Zabeel House by Jumeirah, and Rove by Emaar.
Hilton remains active in the luxury segment, and is expected to elaborate on their expansion plans at the conference this week. The company says it expects to triple its hotel count in the region to over 120 hotels by 2023.
According to a recent statement from Hilton, it currently has 81 new hotels signed with local partners and investors.
Saudi Arabia in focus
Saudi Arabia remains the focus of most operators, despite hotels there suffering from dropping rates due to high supply and low demand.
Hilton says Saudi Arabia is its largest development market in the region, and the company expects to grow from 10 to 40 properties in the country within the next five years.
In a recent interview with Gulf News, ultra-luxury hotel group Four Seasons said that they too were primarily looking for opportunities in Saudi Arabia. The company’s regional president said that the country held the most room for growth in terms of new hotel openings.
This year’s event comes at a time of downward pressure on the region’s hotel revenues, as supply largely continues to outstrip demand.
Jeddah’s hotel market was among the region’s poorest performing in February, recording a 39.7 per cent decline in profit per room on the back of a drop in revenue and rising costs, according to research firm HotStats.
Other issues expected to dominate conversation at the event are sustainable tourism and cruise tourism.
Situated on the beach in a 2,700 square metre contemporary structure, Ahic’s new home will bring together the exhibition, conference, networking lounges, and sponsor showcase areas alongside restaurant and coffee break facilities, organisers said.