Will winter put a freeze on Palm Jumeirah hotel rates?

As the 381-room Fairmont The Palm readies to open in September, competition may just drive rates to be more budget friendly end of season

As the Fairmont The Palm readies to throw down its gauntlet in the populated hotel market that has sprung up on The Palm Jumeirah in recent years, insiders are saying that we could soon see a price war in room rates that would ultimately favour the tourist influx on the man-made island.

The upcoming 381-room Fairmont property will be located on the west facing trunk of the Palm, which, the management say, is the only hotel that will boast that location and will ultimately be its top draw for tourists who are looking for something more in the city other than confining themselves to a destination hotel on the island.

The management added that the Fairmont The Palm’s USP also includes its market draw for those who are looking for something that is more high-end than mid-market properties, but something that will be more attainable in terms of pricing than the uber luxury hotels that have found a home on the island.

Speaking to Emirates 24|7 at the ongoing Arabian Travel Market, Michael Glennie, President and COO of Fairmont Raffles International said:

“What we currently see on The Palm Jumeirah right now are very high end hotels. Our hotel will be more in between mid-market and luxury and will appeal accordingly.

“Plus, we have a function space advantage that no other hotel does on the island.”

Currently, the island boasts five destination resorts, with the pioneer being the Atlantis The Palm that threw open its doors in a mega celebration in 2008.

However, due to the global financial crisis, several hotel projects were delayed or scrapped, a far cry from the island’s masterplan that was slated to host 30 five-star properties, along with 14,000 rooms.

It was only in 2010 that competition to the Atlantis came in the form of The One & Only, which was followed up by Jumeirah Group’s Zabeel Saray, the Kempinski Hotel and Residences and the Turkish brand, Rixos.

As the Fairmont The Palm enters the final lap for its official opening, also expected to open this year is the much-delayed Royal Amwaj hotel, with another Kempinski welcoming tourists reportedly next year after much delays.

Speaking to Emirates 24|7, Martin Van Kan, the general manager of the Fairmont The Palm said: “It is too soon for us to tell you our average room rates or our anticipated hotel occupancy in the first quarter of the hotel’s opening, however, we are confident that we will meet a market demand that will eventually drive the growth of hotels on The Palm Jumeirah.”

Average hotel room rates on The Palm range between Dh2,100 and Dh5,000.

Experts say this barrier could be overcome in the peak winter months as Dubai gears up for a record tourist influx of 10.1 million visitors in 2012.

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