According to the latest figures issued by Dubai’s Department of Tourism and Commerce Marketing (DTCM), Dubai’s hotel portfolio grew during the 12 months of 2014 from 611 hotels and hotel apartments to 659 – a 7.8% growth over the course of the year. With a number of additions to the mid-market segment opening during the year, further additions to the portfolio of three and four star hotels are expected to open in the coming years as a result of incentives launched by the Government of Dubai.
This year’s Arabian Travel Market (ATM) shows evidence of this burgeoning sector in the emirate, with a range of mid-market brands on show including the recently announced partnership between Hilton Worldwide and the UAE-based Wasl Hospitality and Leisure to introduce the mid-market Hampton by Hilton to Dubai and the Middle East. The agreement will see the opening of Hampton by Hilton Dubai Al Qusais and Hilton Garden Inn Dubai Al Garhoud in 2017, adding more than 550 guest rooms to the inventory. Prior to this, two Hilton Garden Inn properties will open in Dubai later this year, with a third slated for opening at Mall of the Emirates in 2016.
Also showcased at ATM is the newly-launched Rove Hotels, a partnership between Dubai companies, Emaar Hospitality Group and Meraas Holdings. Billed as a mid-market lifestyle hotel brand, integrating value and simplicity across all touch-points, 6 properties will open across Dubai before 2020, including Rove Za’abeel later this year. Fellow Dubai brand Jumeirah also have an expansive presence at ATM, including its first mid-market brand Venu, the first property of which is planned for Meraas’ Bluewaters Island, off the coast of Dubai Marina.
As the Dubai Government looks to meet its Tourism Vision of welcoming 20 million visitors a year by the year 2020 and be able to declare itself the ‘number one family destination in the world’, it’s widely recognised that the city needs to further broaden its appeal beyond the luxury traveller for which it has gained its primary foothold and upon which its luxury reputation is based.
Issam Kazim Chief Executive Officer of Dubai Corporation for Tourism and Commerce Marketing (DCTCM), said: “While Dubai is well known for its impressive array of luxury properties, we are keen that the city also caters to those on a more restrictive budget by offering high-quality mid-market accommodation. As we work towards meeting our Tourism Vision for 2020 of attracting 20 million people a year to the city by 2020, we want to ensure that our accommodation caters to all categories of visitor.”
Directives issued by the Dubai Government in September 2013 included an incentive to encourage speed of delivery and increase competitiveness in the mid-market sector. Investors and developers of three and four-star hotels were offered an incentive to waive the 10% municipality fee, that is levied on the room rate for each night of occupancy for a specific timeframe. Additional incentives announced in January 2014, focused on reducing the construction approval process to two months; setting up a one-stop shop for all sector approvals; standardizing all approvals through Dubai Municipality; and allocating government land to develop 3 and 4 stars.
Developers have not only recognised that they can fill a gap in the Dubai market, but are also responding to the global trend (as reiterated in the 2014 WTM Global Trends Report) of cost-conscious travel. Tourists, even those who can afford luxury accommodation, want to stay in affordably priced hotels that offer style.
“Affordable does not equate to low quality,” says Kazim. “Dubai’s reputation is based on high standards and this goes for our mid-market hotel sector too. Dubai always aims to beat expectations and what we call mid-market could easily be considered luxury in many other cities around the world.”
Currently, Dubai has 93,030 hotel keys (January 2015), and that figure is forecast to rise to 140,000 – 160,000 keys by 2020. The additional keys will comprise different asset classes, including hotel apartments, with around 20,000-35,000 keys being from the mid-market hotel sector.
In 2014 alone, of the 44 new hotels and hotel apartments (comprising 27 hotels and 17 hotel apartments), 13 hotels came from the four-star sector and nine of the new apartments fell into the standard classification. DoubleTree by Hilton opened two properties in Al Barsha and Jumeirah Walk; Hyatt Place hotel opened in Deira and the Warwick Hotel opened on the Sheikh Zayed Road.
Going forward, the likes of Premier Inn, Hilton’s Garden Inn, Ibis and Holiday Inn are just some of the prime examples of mid-market brands that have earmarked Dubai for development.
The UK’s well-known mid-market brand Premier Inn is making its presence loud and clear. With three properties currently in the city, the company has announced the openings in 2016 of the 245-bedroom Premier Inn Dubai Healthcare City and Premier Inn Ibn Battuta Mall, which will have the largest key count outside of the UK at 372 rooms.
Meanwhile, InterContinental’s Hotel Group will open its 450-room Holiday Inn Dubai World Central and 250-room Staybridge Suites Dubai World Central this year. The two hotels will be located in Dubai World Central (DWC), along the main route to the Al Maktoum International Airport and a stone's throw from the current terminal.
Holiday Inn Dubai World Central will be the fifth Holiday Inn property to open in the UAE, while the adjacent Staybridge Suites Dubai World Central will be the first franchised property under the brand in the Middle East. The new Staybridge Suites hotel joins a pipeline of two other Staybridge Suites properties set to open in the next three to five years across the UAE.
What’s more, mid-market hotels are also securing prime locations within the city. A perfect example is the announcement that Dubai-based Byblos Hospitality is to build a new 144-room, low-cost hotel on the prestigious Palm Jumeirah – real estate that up to now has been considered the reserve of those hotels boasting five stars. This property is slated to open in 2016.
About Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism)
With the ultimate vision of positioning Dubai as the world’s leading tourism destination and commercial hub, Dubai’s Department of Tourism and Commerce Marketing’s (Dubai Tourism) mission is to increase the awareness of Dubai to global audiences and to attract tourists and inward investment into the Emirate.
Dubai Tourism is the principal authority for the planning, supervision, development and marketing of Dubai’s tourism sector; markets and promotes the Emirate’s commerce sector; and is responsible for the licencing and classification of all tourism services, including hotels, tour operators and travel agents. Brands and departments within the DTCM portfolio include Dubai Convention and Events Bureau, Dubai Calendar, and Dubai Festivals and Retail Establishment (formerly known as Dubai Events and Promotions Establishment). In addition to its headquarters in Dubai, Dubai Tourism operates 20 offices worldwide.