Dubai to see more affordable hotels

Mid-market travel, which is a key growth segment for the region’s hospitality and tourism sector, has been selected as the official show theme for Arabian Travel Market (ATM) 2016, which will take place at the Dubai International Convention & Exhibition Centre from April 25-28, 2016.

“Data released by Jones Lang LaSalle (JLL) revealed that up to 50 per cent of the 3,600 new hotel rooms to enter the Dubai market in the final months of 2015 have a 3-star or lower rating, while competitive room rates are set to rival the luxury market, as 69 per cent will have four stars or less according to research,” said Nadege Noblet-Segers, Exhibition Manager, Arabian Travel Market.

“This will add the much-needed midscale room stock to the emirate’s hotel landscape, where three-star or below room supply only accounted for 29 per cent of total availability in the first quarter of 2015,” she added.

Destinations like Dubai are already putting in place programmes to encourage investment into midmarket hotels such as the release of government land plots for three- and four-star hotel projects, speeding up of the construction permit approval process to just two months, and the waiver of the 10 per cent municipality room tax for four years upon completion.

Dubai currently has a total hotel key count of approximately 94,000. This figure is set to rise to between 140,000 and 160,000 keys by 2020 with around 20 per cent set to target the mid-market hotel sector. A host of global hotel brands and local UAE-based operators are targeting the aggressive brand expansion in this area, especially after the latest Knight Frank report.

The study revealed that the Dubai segment showed a year-on-year RevPAR increase of 0.5 per cent during the first quarter of the year, which was driven by an increase in average rate at a time declining performance for the luxury and upper upscale segments. Demand is being driven by a growing middle class in markets such as China, India and Africa combined with budget Generation Y travellers and young families.
 

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