Dubai targets mid-market hotel growth to meet 2020 targets

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, said the emirate’s tourism agency, Department of Tourism and Commerce Marketing (DTCM). 

Downtown Dubai
Downtown Dubai

The figures were released at this year’s Arabian Travel Market (ATM), which concluded last week.

However, 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, CEO 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; standardising all approvals through Dubai Municipality; and allocating government land to develop 3 and 4 stars.

“Affordable does not equate to low quality,” said Kazim. “Dubai’s reputation is based on high standards and this goes for our mid-market hotel sector too.”

Currently, Dubai has 93,030 hotel keys (January 2015), and that figure is forecast to rise to 140,000 – 160,000keys 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. An 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.

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