Hospitality players are constantly debating with the idea of quicker returns and looking at the market conditions and demand in Dubai, the answer is clearly the budget segment.
Laurent A Voivenel, CEO, HMH – Hospitality Management Holdings, said: “Budget hotels are the most profitable long-term investment. And now is the time to build these in Dubai. The market is ripe and is in urgent need of more budget rooms, if it is to diversify its segments, attract growing middle class travellers from emerging economies of Asia and Africa as well as cater to Dubai Expo 2020 visitors. It is an unprecedented opportunity that investors can capitalize on.”
There is a near saturation with regards to luxury hotels in the market. Over supply of rooms in this segment is putting a tremendous pressure on rates that in turn is affecting ROI. However, the same is not the case with mid-market hotels. Given the demand, investors can expect double digit ROI (10 to 12% every year) with the right product and location.
Laurent concludes by adding: “We offer value and returns to hotel owners and investors with the right blend of expertise, strategy, technology and market reach. Having a strong management infrastructure in place, we are able to respond swiftly to any market dynamics and challenges.”