Dubai hospitality to experience massive boom: Dubai FDI

Sector attracts global players with business activity streamlined

Dubai’s ambitious growth strategy for its hospitality sector is proving to be a big draw among international players and Dubai Investment Development Agency (Dubai FDI) in the Department of Economic Development (DED) in collaboration with foremost company formation specialists The Links Group, is simultaneously making a strong bid to bring more global operators into the emirate.  

“The hospitality sector in Dubai is set to experience a massive boom, with more than 24,000 hotels and serviced apartments expected to enter the market in the next three years,” said Fahad Al Gergawi, Chief Executive of Dubai FDI.

With Dubai expecting to attract 20 million tourists by the end of the decade, according to the emirate’s Tourism Vision for 2020, investment in hospitality infrastructure and services is a top priority for the government. Dubai’s hotels welcomed more than 11 million guests in 2013 – an increase of just over 1 million on 2012 figures and an indication that Dubai is on track to achieve its 2020 visitor target.

“Coupled by our successful bid to host Expo 2020, Dubai is becoming an increasingly attractive investment destination for foreign hospitality companies. It is important we continue to evaluate and evolve commercial activity in the sector in order to attract the most innovative companies to the emirate,” said Al Gergawi.

While the tourism sector is well recognised as a significant driver of Dubai’s GDP, some of the larger international hotel management companies have been slower to enter the market. However, Dubai’s willingness to review and evolve commercial activities permitted in the hospitality sector has given a strong reason for such companies to move to the emirate.

“Previously, international hotel operators had to partner with local property owners to operate in the emirate. This restricted potential expansion opportunities and meant a gap existed in satisfying internal risk criteria for a lot of these companies.

“Now, with the help of Dubai FDI, we have specific commercial activity for hotel management services introduced in Dubai and this has attracted owner-operator brands like Four Seasons Hotels and Resorts to Dubai as well as seen the restructuring of brands like Radisson Blu. It has also allowed property developer The First Group expand into serviced hotel apartments and hotels,” said John Martin St. Valery, founding partner, The Links Group.

“With the help of Dubai FDI, Department of Tourism and Commerce Marketing (DTCM) and The Links Group we were able to get hotel management operations recognised as a highly demanded and relevant activity that should be supported in line with the vision of Dubai Government to grow the tourism and hospitality sector. This means The First Group can now independently own and manage our line of serviced hotel apartments and hotels, which brings significant revenue potential to our Dubai based business while supporting the market’s need for additional hotel keys,” said Rob Burns, Chief Operating Officer for The First Group.

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