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Dubai heads global room rate statistics

The disciplined manner in which many of Dubai’s hospitality real estate projects have reached completion, bringing in their wake a much-needed increase in room inventory and rate, bodes well for the future of the emirate’s hospitality sector, according to Gerald Lawless, Executive Chairman of Jumeirah Group.

He said that Dubai currently leads global hotel statistics with an average room rate of US$283 in 2007. Meanwhile, other Gulf cities also topped the $200 mark. Lawless said he does not anticipate any fall-out in rates as hotel room stock increases across the region.

“The average rates we are now enjoying may level off, but I don’t see them decreasing,” he said.

He went on to note that demand for hotel accommodation is healthy and not reliant upon one customer stream: “The region has wisely spread its attention across multi-faceted projects such as Burj Dubai, The Palms in Dubai, The World islands, Dubailand, Dubai Sports City, Festival City and Healthcare City.

“Dubai, particularly, has interwoven its residential projects with sector-specific master plans such as Dubailand, Sports City and a wide variety of commercial cities. It has shown how to successfully pull visitors from all sectors, including commerce, family tourism, meetings, events and exhibitions,” he observed.

Remaining with Dubai, Lawless said that he believes occupancy rates and levels can be maintained: “Dubai remains an opportunity as it develops as a true, multi-interest destination that will more than double in size, as will the local-based airline, Emirates’.”

However, Lawless warned that when it comes to promotion, ‘one size no longer fits all’.

“Promotion was once successful if generic across all audiences but now with all these different projects and offerings we have to adjust our message accordingly.

“We have to target specific profiles and markets with specific messages,” he said.

Referring to the recent upheavals in global financial markets, Lawless is optimistic that the Middle East will ride out any recession, pointing to its international dimensions to substantiate growth.

“What the region has done is to emphasise the need to look for new market segments, not just the traditional markets,” Lawless continued.

“At Jumeirah, for example, we are looking at Asia in general, and China and Japan in particular – we have already received high-end groups from the former at Burj Al Arab and this type of business will be enhanced with an approved-destination status for the UAE.”

Another key market in future could be the Americas, he predicted.

However, while the region is gearing up to take its place as one of the world’s major business and leisure hubs, Lawless said elements such as environmental and sustainability issues, as well as human resources would be key in achieving continued success.

“Human capital is a major challenge, not just getting new people in to man the hotels opening in the region but also in retaining trained staff.

“Headhunting is rife and it is important for us to deliver as ‘an employer of choice’ – a task that will become easier as we expand and can offer an international career path, where we could not in the past.”

Sessions at AHIC 2008 will address many of these topics in detail to provide local developers and international operators with guidelines for practical application in regional expansion of the hospitality sector.

In focus will be Shariah-compliant hotels, mixed used developments, fractional ownership, investment, acquisitions, super luxury brands and new regional names, management contracts, green development and brand strategies.

“While the Middle East is a ‘hot’ topic for everyone involved in the hotel industry, there is still much to be learned about doing business here and strategies that are appropriate for its focused growth,” confirmed conference co-organiser, Jonathan Worsley.

“Visitors to AHIC are from the most senior levels of the industry, and they are all converging on Dubai to look and learn, as well as network to move the sector forward.”

The Arabian Hotel Investment Conference will run from May 3-5, 2008 at Dubai’s Madinat Jumeirah Convention Centre and is jointly organised by The Bench and MEED.

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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