Economy hotel operators are planning to increase the number of rooms in Dubai as the emirate seeks to broaden its appeal as a tourist destination.
While Dubai has garnered fame for its luxury hotels - such as the Burj Al Arab in Jumeirah - options for travellers on more modest budgets have until now been somewhat thin on the ground.
The Dubai Government recently said it wanted to double the number of tourists visiting each year to 20 million by 2020. To meet this goal, the emirate will have to bring in tourists on a tighter budget than the big spenders who have typically visited.
Accor is currently the biggest provider of budget rooms in the Arabian Gulf, said Christophe Landais, the group's managing director for the Middle East. It operates 12 Ibis hotels in the economy category and 12 Novotels in the mid-range category. Accor will open five more Ibis and six more Novotel hotels before 2015.
"In the past, there really was a gap between the luxury upscale hotels and the unbranded local hotels," Mr Landais said. "Ibis and Novotel have been quite successful in filling that gap. But as for economy options, we are very low at the moment [in Dubai]. There is room for the development of international branded hotels. There needs to be the right mix of economy, mid-scale and luxury hotels."
Dubai currently has the world's highest revenue per available room, a key industry measure, at US$356.98.
At Novotel's newest property in Dubai's Al Barsha area the opening rates started at Dh350.
Seventy per cent of Ibis's guests are from the GCC and the Levant.
Citymax Hotels, which operates three-star properties (considered to be in the economy category), plans to grow its presence in the UAE in the next five years as it bets on the arrival of more modest-spending tourists.
Dubai is currently well served by five-star and deluxe properties and there is unlikely to be much opportunity for growth in that category, according to Russel Sharpe, the chief operating officer of Landmark Hospitality, the parent company of Citymax Hotels. But there is "huge potential" in other areas of the market, he said.
Citymax currently operates three hotels in the UAE - two in Dubai and one in Sharjah - for a total of 1,350 rooms. In the next five years it plans to add three more hotels in Dubai: in Deira, Business Bay and Tecom.
"This will be a platform to go further afield ... into Saudi Arabia, Qatar, Bahrain and Oman," Mr Sharpe said.
The number of rooms will almost triple to 5,000 in the next five years across the GCC.
Citymax's guests typically come from Russia and the former Soviet Union, China and India. More recently, it has won new business from South Korean visitors.
Mr Sharpe said to meet its 2020 target, Dubai should also focus on building many more family attractions, such as the Global Village. The opening of the Dubai World Central airport will also increase the potential for more low-cost and charter airlines to operate, another important element of the strategy.
Rudi Jagersbacher, Hilton's regional president, is also eyeing the budget market, especially for those on a quick layover in Dubai.
"The transit market, where people stop and move on, has become a key market," he said. "The difference between full service and limited service is where the opportunity is - in the affordable stay."
He also noted the importance of the increasing number of visitors using budget airlines.
"Some of the budget carriers popping up I find very interesting," he said. "That is increasing the volume of visitors."
Flydubai expects to carry 6 million passengers this year, the Dubai Media Office tweeted recently, citing the budget airline's chief executive Ghaith Al Ghaith.
lgutcher@thenational.ae
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Biography
Favourite Meal: Chicken Caesar salad
Hobbies: Travelling, going to the gym
Inspiration: Father, who was a captain in the UAE army
Favourite read: Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter
Favourite film: The Founder, about the establishment of McDonald's
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
The biog
Hobby: Playing piano and drawing patterns
Best book: Awaken the Giant Within by Tony Robbins
Food of choice: Sushi
Favourite colour: Orange
