Welcome to Dubai

Richard Riley, General Manager for Emaar Hospitality Group, provides his thoughts on the stratospheric growth of Dubai’s tourist infrastructure.

It has been argued that Dubai could have attracted more tourists over the past few years if there had been more hotel rooms. However, tourism in Dubai has evolved in the past years through the concerted efforts of the government and various agencies in popularising the destination in new international markets. The number of hotel rooms does not seem to have been a constraint for tourism growth in the past; in fact, the increasing supply of hotel rooms has accommodated the ever-increasing demand of the tourist market to current levels. 

Tourism arrivals to Dubai are estimated at 15 million visitors by 2015. This means it is important that Dubai enhance the number of hotel rooms to accommodate the increase in visitor inflow.

Dubai currently has over US$354 billion worth of hotels, aviation and other hospitality infrastructure projects under development. The Dubai Department of Tourism and Commerce Marketing targets increase in room capacity of hotels and hotel apartments by 171.2 percent from 46,775 to 127,100 by 2016, with the number of hotels to increase to 414 and rooms to 112,000.

Room rates are expected to rise significantly throughout the world this year, particularly in the luxury and business markets. Dubai has the highest hotel room occupancy in the region with average occupancy rates of 85 to 90 percent. Dubai also has the highest average room rate at US$282 and highest revenue per available room at US$237 in the region, according to estimates. These rates are reflective of the increased demand for rooms, driven by the growth in tourism and business.

Room rates are an indication of demand and supply. The current infrastructure growth in the hospitality sector will equip the Middle East region to meet growing demand. Also, it must be realised that the luxury hospitality sector has traditionally been associated with a premium, which the discerning guests are willing to pay for the guest experience offered.

Tourism has now become one of the prime drivers of the economies of most Middle East nations, especially those in the Gulf region. The UAE, Saudi Arabia, Oman, Bahrain, Qatar and Kuwait have all benefited from the inflow of business and leisure travellers. Today, tourism provides the lion’s share of the non-oil GDP of most of these nations.

For Emaar Hospitality Group, this presents a new growth opportunity. It drives us to expand geographically and build portfolios that meet market demand. This is reflected in the recent launch of The Address Hotels and Resorts by Emaar Hospitality Group, a homegrown five-star hotel brand with global ambitions that will assure tourists a truly distinctive, benefit-focused guest experience.

For business travellers, staying in a hotel can be one of the most costly and tiresome aspects of being on the road. Increasingly, this group is choosing an alternative that offers the feel of home with the luxury and amenities of a hotel – the serviced apartment. Serviced residences are a fast-growing segment in the region, and Emaar Hospitality Group has already launched Nuran Serviced Residences to meet this segment. However, we believe that serviced residences will not come to replace hotels and in line with this thinking, we are redefining the business hotel experience.