Stellar Performance by Abu Dhabi Hotels In September

The Abu Dhabi hotel market continues to gain momentum with four to five star hotels reporting positive gains in performance levels for the month of September compared to last year, according to the latest HotStats report by TRI Consulting. Abu Dhabi has been having challenges over last couple of years because of the increase in new supply which had an impact on the average room rates.

However, in the last two to three months the average room rates have started to increase and bottom out. The September data from HotStats reports shows that YTD performance for Abu Dhabi hotels is actually increasing; the Average Room Rate (ARR) increased by 4.2% to US$128.96 while occupancy grew by 6.6 percent points to 76.6%, resulting in revenue per available room (RevPAR) rising 14% to US $98.76.

There is a marginal increase compared to 2013 which is great news for Abu Dhabi because the city is attracting a lot more visitors which in turn has resulted in very strong occupancy levels and it has helped the hoteliers to turn that corner and start yielding more effectively when it comes to room rates.

The hotel profitability is relatively strong in Abu Dhabi but the rates are still comparatively lower than the hotels in Dubai, Fujairah and Ras Al Khaimah. This difference in rate is because of huge influx of supply and a weak demand for a last couple of years. So, the hoteliers resorted to drop their rates to get people into their bedrooms but now that the demand has shifted and a lot of people have started coming through, the rates have started coming up. In fact it is projected that in the next couple of years the Abu Dhabi hotel rates will be on par with Dubai.

The biggest source market for Abu Dhabi is India. The Secondary market is with the UK and US but surprisingly Abu Dhabi doesn’t attract a large proportion of Saudi Arabian visitors. Saudi Arabia is the largest source market in Dubai yet it doesn’t register in the top 5 markets in Abu Dhabi.

A lot of new real estate, retail, leisure and entertainment projects are in the pipeline to cater to the growing needs of the visitors. In fact, Macy’s and Bloomingdales, two of the biggest departmental stores in the US, are planning to set up shop at the capitals Al Maryah Island and with Yas mall opening in November Abu Dhabi will attract more regional visitors because it has a greater retail offering. Retail drives the people and if you look at the Saudi visitors, their biggest motivation is leisure and shopping.

Abu Dhabi is also building up the level of demand to attract large groups of 90+ but they don’t have the infrastructure. ADNEC has the capability to cater to large groups but they don’t have the driving force. Abu Dhabi is trying to position itself as a destination to attract international visitors but Dubai is still leading the way.

Having said that, the hotel occupancy will continue to grow in Abu Dhabi as it gears up for world class events like Formula 1 Abu Dhabi Grand Prix and opening of retail space in the near future.

Ras Al Khaimah Hotel Revenue Up By 47% In Q3

The Tourism chief at Ras Al Khaimah announced recently that the hotel room revenue grew by 47 % in the third quarter of 2014 as the emirate is a popular destination among the tourists.

Last year the 1 million barrier was not broken until November, demonstrating the rocketing tourism growth being experienced by the Emirate, which has 65 kilometers of prime beach coastline.

Steven Rice, the CEO of RAK TDA said that “Our percentage growth in guest nights for the third quarter of 2014 compared to the same period last year was 72%, so extremely impressive.” He also mentioned that “We are also seeing significant increases in the number of people searching for Ras Al Khaimah in Google, in visits to our website, and in the levels of engagement via our social media presence. In addition, hotel room revenue increased in the third quarter of 2014 by 47% compared to last year."

RAK is a very popular emirate among the residents for a getaway during Eid and public holidays. The emirate attracted over 63,870 guest nights during 5 days of Eid Al Adha, domestic UAE travelers accounted for 32%, UK 12%, Russia 12% and Germany 10%.

According to data gathered from Smith Travel Research report, Ras Al Khaimah’s average daily room rate (ADR) was 19% higher than Abu Dhabi, which was supported by new openings on Al Marjan Island and Waldorf Astoria, which was Hilton luxury brands’ first property in the UAE.

Rice also commented on future prospects “Forward bookings are looking strong, interest in the emirate across multiple business sectors is on the rise and overall we expect the positive growth patterns experienced in Ras Al Khaimah to continue."

Earlier this year Ras Al Khaimah said it was launching a new tourism branding, pitching the emirate as a “world class leisure destination” and retreat from the urban cities such as Dubai. RAK TDA is considering building a mountain village and establishing mountain climbing and zip lining to attract tourists and to add to the list of activities.

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Marriott To Operate New Dubai Theme Park Hotel

Marriott International is to operate the new family centric hotel, Lapita, at Dubai Parks as part of the major theme park project in Dubai.

The Polynesian themed, Lapital Hotel will operate 503 keys under Marriott’s Autograph Collection and is due to open in 2016, in line with other developments. This hotel is Marriott’s first independent hotel collection in the Middle East.

The hotel is a key component of the Dubai Parks and Resorts which is strategically located in Jebel Ali, between Dubai and Abu Dhabi and is set to open in 2016 as part of the first phase of the project, which also features Bollywood Parks Dubai, Legoland Dubai and Motiongate Dubai. Dubai Parks and Resorts LLC, a Meraas Holding company is developing the project and began construction on the Hotel in February.

The Lapita hotel is named after the pre-historic Pacific Ocean people who were considered nautical experts and ancestors of the Polynesian race. It will draw inspiration from the exotic Polynesian tropical landscapes, featuring Polynesian flowers, lagoon-style pools, themed activities and dining options. An in-house entertainment component will serve as another key attraction and Lapita will also feature relaxation zones.

Alex Kyriakidis, president and MD of Marriott International, Middle East and Africa, said: “We are delighted to bring the much-anticipated Autograph Collection brand to the Middle East. We are confident that given the ambition, drive and commitment of our partners, Dubai Parks and Resorts will emerge as the premier theme park destination in the Middle East, and provide a perfect fit for our debut Autograph Collection hotel in the region.”

Region’s first Hard Rock Hotel to Open in Dubai Marina

The first Hard Rock Hotel in the Middle East is expected to open in Dubai Marina in Mid 2015. The hotel will be located in Dubai’s 2^nd tallest tower, Marina 101 tower, will be the first Hard Rock branded Hotel in the Middle East, with a second hotel, scheduled to open in Abu Dhabi in 2017.

The 281 room Hard Rock hotel will occupy the first 33 floors of the Marina 101 tower, which is developed by Sheffield holdings. The club lounge and dining venue will be located on the 101^st floor of the second tallest tower in Dubai.

The Hard Rock hotel will include a Rock Spa, featuring the new body and rhythm, spa menu. The property will also feature pre-meeting and events space, including a outdoor terrace at lobby level and a lounge area on 101st floor with a rock shop for selling Hard Rocks’ merchandise and The Sound of your Stay – an exclusive music program for the Hotel guests.

Hard Rock has partnered with Abu Dhabi Financial Group to launch the Hotel in the region. Hamish Dodds, Chief Executive of Hard Rock Group said that they chose to open the hotel in Dubai Marina as it is centrally located in the New Dubai with an urban proximity of Dubai Media City, which is the hub of entertainment and business.

Hard Rock has 21 hotels, 145 cafes and 10 casino’s worldwide. Regionally, Hard Rock plans to open hotels in Egypt, Morocco and Doha in the next two years. In the UAE, it is considering opening a hotel in Ras Al Khaimah.

The hotel property was previously intended to be operated by Hampshire Hotels Management in association with Wyndham Hotel Group, but Sheffield Holdings confirmed in July 2014 that the companies were no longer involved with the project.

Accor Reaches 100 Hotels Milestone In Middle East

Accor Hotel Services Middle East has reached a major milestone of 100 Hotels in the Middle East with 66 operational Hotels and 34 more properties under development across 10 Middle Eastern countries ahead of its schedule of 2015. The Hotel group's regional network covers all segments of the hospitality market including luxury, upscale, mid-scale, economy with a total of approximately 24,500 keys. The Hotel group is one of the largest operators in the Middle East.

To mark the occasion, Accor has launched the ‘100 Unsung Heroes’ initiative to identify and recognize 100 employees from its regional operations who have made a significant contribution to the group’s success.

The 100 employees will each receive a cash prize, and the group will host a ceremony to donate 10,000 to the Red Crescent Society.

Sofitel, The Palm Jumeirah, Dubai

Christophe Landais, COO for Accor Hotel Services Middle East, said: “We are delighted to reach our target of 100 hotels in the Middle East. It is a great achievement made possible by the strength of our relationships with our regional partners and the fantastic commitment of our employees. I would like to thank them all for playing an important role in our shared success, and I’m especially proud of the fact that we achieved this major milestone ahead of our scheduled target date of 2015.”

As the regional market leader in economy and midscale segments, Accor is helping to meet the growing demand for 3 stars and 4 star Hotels in the Middle East region. Accor already has a number of properties under the Sofitel, Pullman and McGallery brands in the region and many more under development.

The COO, Christopher Landais, said that “the strategy of expanding aggressively through select development tailored to each market location, in partnership with leading regional investors has delivered outstanding results so far. He also added that “This success has been underpinned by the establishment of the Académie Accor Middle East in 2003, the first training academy of its kind in the region, which ensures the development of skills and advancement opportunities for our employees. Looking ahead, we see exciting opportunities to expand our portfolio of hotels across the region in the years to come."

MEA Hotel Occupancy Up By 13.1% in September

The Middle East/Africa region reported positive performance during September with a 13.1 per cent increase in occupancy to 65.5 per cent, a 1.3% increase in ADR (Average Daily Rate) to $145.12 and a 14.5% increase in RevPAR to $94.99, according to STR Global Data.

Elizabeth Winkle, managing director of STR Global said that “It is positive to see consistency in performance in spite of instability leading to uncertainty in certain countries.”

“Amongst the high performers, Saudi Arabia is one of the region's strongest in September as the country was gearing up for Hajj, which took place the first week in October”, said Winkle. “Cairo, whilst still in recovery mode, achieved occupancy levels of 51.8 percent with significant year-over-year growth of 107.5 percent”.

Some of the key trends from the regional key markets for September 2014 include:

• Egypt recorded 138.3% increase in occupancy to 60.8 %, and a 15.6% increase in ADR to EGP 523.76 and a whopping 175.4% increase in RevPAR to EGP 318.49.

• Saudi Arabia reported an increase of 26.7 % in Occupancy to 66.3%, a 28.1 per cent increase in ADR to SAR 858.62, and a notable increase of 62.3% in RevPAR to SAR569.12

• In UAE, Occupancy decrease by 0.1% to 72.9 %, ADR was down by 3.3% to AED 575.83, and RevPAR decreased by 3.4% to AED 419.85.

Four markets achieved double-digit or more RevPAR growth: Cairo (+133.9% to $55.82); Beirut (+68% to $82.99); Jeddah (+21.9% to $216.34); and Doha, Qatar (+12.2% to $127.50). 

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Booking.com, Hilton, Emirates and Etihad - World’s Most In-demand Employers: LinkedIn

LinkedIn recently announced the 100 most attractive employers its members would like to work for, and a few renowned companies from the Hospitality business, online Travel & Tourism, and Aviation industry made it to this list.

LinkedIn, the world’s largest professional network on the Internet, announced the rankings at its 2014 Talent Connect conference held recently in San Francisco. Booking.com was ranked as the 68th most in-demand employer among other notable companies, including Google, Apple and Unilever.

The companies on the list represent 17 countries, 59 cities and 33 industries. While the top 3 represented industries on this list were Tech, Telecom and Media, Retail & Consumer Products, and Oil & Energy.

Among the Travel and Tourism industries that make the top 100 list are booking.com (68^th), Airbnb (60^th) and Expedia (65^th).

Booking.com was one of the top tech disruptors to enter the attractive employers list as they were not featured in the 2013 list. Booking.com is owned by Priceline and the parent company (Priceline) has acknowledged that retaining Booking.com’s motivated and capable management allowing the brand to operate independently and offering Booking.com’s breadth of hotel supply have contributed to its phenomenal growth. The tech developers at booking.com make decisions based on real time data by analyzing the behavioral patterns of consumers and by using these search results they tailor their offering to the consumers. Employees at booking.com work hard and play harder. The work environment at booking.com is friendly, supportive and casual. They have a dynamic task force that contributes towards their success which makes it a very popular employer in the online travel and tourism category. 

Among the hospitality business, Hilton Worldwide came in 55th place, while Four Seasons Hotels & Resorts came in close behind in 59th place.

The UAE’s two major airlines, Emirates (52) and Etihad (82), also made it to the Linkedin rankings.

The ranking is based on the analysis over 35 billion interactions between companies and members on LinkedIn. The way companies are ranked boils down to LinkedIn member awareness of a company (e.g. how many people have viewed an employees’ profiles within the past year) and engagement on LinkedIn (e.g., how many members have followed a company’s Company or Career Page within the past year). Higher talent brand awareness and engagement among members on LinkedIn equal a more effective talent brand and a higher InDemand ranking.

637 Hotels Under Contract in MENA

The Middle East and Africa has 637 hotels under contract, with 151,205 rooms, according to STR Global’s September construction pipeline report.

139 hotels opened year to date, with 33,232 rooms in the region, according to the global research firm. It expects 82 hotels, with 18,538 hotels to open in the remainder of 2014.

The most rooms are planned to be added in the upper scale segment (5419 in 18 hotels), followed by the unaffiliated segment (4626 rooms in 22 hotels), the upscale segment (3,531 rooms in 13 hotels) and the luxury segment (3480 rooms in 150 hotels).

By 2015, 145 hotels, with 32,271 rooms are due to open in the region. The upper upscale segment is expecting to add the largest addition of rooms. i.e. 38 hotels with 12,516 rooms, followed by the luxury segment (26 hotels with 5,318 hotels) and the upper segment (31 hotels, with 5,024 rooms)

A number of hotels have opened in the UAE, in 2014, such as the Double Tree by Hilton Hotel and Residences in Al Barsha-Dubai, Sofitel Downtown and Holiday Inn Abu Dhabi downtown.

According to the data provided by the Dubai’s Department of Tourism and Commerce Marketing, more than 7000 rooms were added in Dubai since June last year bringing the total to number to 88,680 rooms across 634 properties.

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Hilton Eyes Gulf Cities To Launch New Hotel Brand

Hilton Worldwide has identified major cities across the Middle East including Dubai, Abu Dhabi, Muscat and Bahrain as possible homes for its lifestyle brand – Canopy by Hilton.

The company launched the brand last week at an event for owners and developers in Orlando, Florida, specifying how it would take the emphasis off design and target the leisure and business travelers.

The company has announced just one location outside the US, i.e. in London, and is also eyeing other opportunities elsewhere, including the Middle East.

According to Hilton Worldwide luxury & lifestyle brands global head John Vanderslice, “Canopy by Hilton is something our owners have told us they want from a Hilton brand. It is an  energising new hotel offering simple, guest-directed service, thoughtful local choices, and comfortable spaces, so guests simply feel better going forward.” 

John Vanderslice, said that Hilton has identified a number of prospects across the region to expand including Dubai, Abu Dhabi, Muscat and Bahrain, where there is a wealth of local flavor and culture which is suited to the brands offering. He also mentioned that Canopy by Hilton is an accessible lifestyle brand and that they could build a bigger and a brand than the competitors have in this segment.

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Melia Hotels To Make Qatar Debut in January

Melia Hotels has signed an agreement with Tanmiyat Real Estate Investment Company to open its first hotel in Qatar. The hotel will be located in Doha, the 280 room five star hotel is set to open in January in West Bay and will be the third property in GCC.

There will be 37 suites ranging from executive to Royal suite, and the hotel will also feature fine dinning international and specialty restaurants, a spa, pool and gym.

The agreement for the hotel was signed this week in Doha in presence of the CEO of Tanmiyat Qatar Rea Estate Investment chairman, His Excellency Dr. Brain Bin Saeed Al Marri, and International Vice President of Melia Hotels Gabriel Escarrer.

Melia already has one operational hotel in Dubai, while a second designed by Zahid Hadid, slated to open in 2016.

Theme Park Hotels: Key for MENA Regions Hospitality Market

Colliers International highlights potential to create micro-destinations and capture MICE market. As the region’s major cities compete to become leading global travel destinations, the theme parks and resorts are playing an important part in shaping the infrastructure and attracting family visitors. There are close to 45 attractions and water parks in the region according to a report by Colliers International, with plans for several more, including the world’s largest indoor theme park, which is coming up in the Mall of the World development in Dubai.

The report also found that, while the Middle East region doesn’t lack amusement and entertainment centers, the concept of having the hotels or lodging facilities close to the destination is still underdeveloped.

Traditionally, leisure attractions have been developed to support existing hotel resorts in the region, such as the Aquaventure water park in Atlantis and the Wild Wadi water park connected to the Jumeirah Beach Hotel. Such attractions enhance a guest’s experience at the resort and this in turn increases the length of stay in the specific resort.

There will be opportunity to have themed hotels in and near upcoming attractions in Dubai including IMG World of Adventure and Meraas Holding’s Dubai Parks and Resort’s project in Jebel Ali, which will include Motiongate Dubai, Bollywood Parks Dubai, and Legoland Dubai.  

However, with number of major theme parks in the region, the developers and investors should look to build hotels in and around these developments to support the destination and capitalize on the constant flow of tourists.

Filippo Sona, Head of Hotels at Colliers International MENA said that, “Having the visitors stay close to the vicinity can extend visitors stay and increase the tendency of repeat visits, which generates significantly larger returns than from the Theme parks alone.”  

According the Global Research, the theme park hotels located within the theme park trade at an average occupancy level of 2 to 10 percent higher than the city hotels. Although, the theme park hotels generally target the leisure and family guests, but these hotels also have the potential of attracting the MICE groups if they are segmented effectively.

The Report also recommended four guidelines for theme park hotel:

• Proximity and access: accessibility to the city centre will have a direct effect on the overall destination appeal.
• Avoid over-theming when unnecessary: Be flexible and use ‘hard’ and ‘soft’ theming to manage costs while creating destination’s signature experience.
• Don’t forget the MICE: Diversifying the segment mix broadens the destination’s appeal and can soften the impact of seasonality.
• Target regional tourists: Theme park demand is driven by regional and domestic tourists, and it is crucial to align the design, facilities and theme with the Middle Eastern preferences.

Filipo Sona added that “Globally theme Park demand is driven by leisure guests, especially families from the regional domestic markets. It is crucial to target them effectively. This means larger rooms and more of them, mid and upscale hotels rather than luxury, with the right, mix of F&B outlets and facilities that cater to the domestic tastes and preferences.”

The report stresses that creating a theme that has the maximum impact on guest experience and a minimal impact on the costs.

Filipo Sona concluded that “There is genuinely huge potential for theme park hotels in the region. By observing global theme park hotels and their success factors, we are confident that these developments can thrive in the region. However the real winners are that pick the right location and broaden their appeal just beyond the leisure guests and control costs by taking a flexible approach to theming. It’s only a matter of time before we truly see a world class destination in this segment in the Middle East.”

Luxury Designer Branded Hotels On The Rise In Dubai

The developers in the region have realized that there is nothing quite like the lure of luxury and are discovering that associating a prominent brand with a Hospitality and Real Estate project is a winning formula. While the region’s retail sector is closely associated with global luxury designer labels, the hospitality and Real Estate industry is catching up now.

According to Chibeb Ben Mahmoud, Executive Vice President and Head of Hotels and Hospitality Group Jones Lang La Salle, designer hotels have identified Dubai as an important market as the city strengthens its role as business and leisure hub.

The Armani Hotel, Dubai, flagship property of Armani Hotels and Resorts is the prime example of luxury branded hospitality in the region. The Armani Hotel recently celebrated its fourth anniversary following their successful strategy. 

According to Harmen de Jong, Partner – Development Consultancy at Knight Frank, Before the launch of Armani Hotel in 2010, Dubai’s Hotels were primarily segmented into branded full service, select-service and unbranded independent hotels. The segmentation was driven by demographics, i.e. age, disposable income, and ethnicity. However, operators in Dubai realized that there was a potential gap in the market, as the segmentation and demand was driven by popularity of boutique and lifestyle hotels elsewhere. The designer hotels provide more options to the guests travelling to this region and eventually create a competitive market.

The market is expected to be more competitive as more luxury designed hotels are scheduled to open in Dubai in the next few years.

Another designer brand, Bulgari, will be venturing into the Hospitality industry as it has signed a deal with a Dubai based real estate developer Meraas Holding to build a Bulgari hotel on Jumeirah Bay Island off the Jumeirah Beach Road in Dubai. This Hotel will be the world’s 5^th Bulgari Hotel and Resort property,  comprising 100 rooms and suites, along with 20 hotel villas spread over 1.7 million sq ft. The property will be designed by Italian architectural firm Antonio Citterio Patricia Viel and partners, and it will feature a marina and will have a mix of traditional and modern themes. The property will be sculpted into the shape of a Titanic horse.

Lamborghini is another designer brand is eyeing the emirate for its next hospitality venture. A Lamborghini hotel in Dubai is in the discussion phase at the moment. Other brands like Cavalli and Baccarat have also been in the talk for hotel projects but no formal announcements have been made yet.

In the meantime, Versace is well underway with the Palazzo Versace Hotel in the Culture Village District, scheduled to open end of next year. The Hotel will be the world’s second Palazzo Versace Hotel, comprising 215 luxurious hotel rooms and 169 one to six bedroom condominiums. Around 95 per cent of the condominiums have been sold and those who have bought them can use the Hotels’s adjoining facilities. The project is being developed by Enshaa, a local Real Estate development in Dubai. The prices of the condominium started at 2.5 million when they were launched initially, with an option to select from a fully furnished residence and personalized by Versace.

Another well known luxury designer, Fendi has tied up with local Real Estate developer Damac Properties for a first Fendi styled residence apartment designed by Fendi Casa in Dubai. Damac Rezidence will feature interiors designed by Fendi Casa, situated in Dubai Marina, comprising of 200 apartments housed on 43^rd and 84^th floor of Damac Heights, a luxury property for the style-savvy investors. Work is underway for this project and is expected to be completed in 2016.

Experts believe that growing interest of luxury brands is good news for Dubai. However, while the high standard required by the luxury brands will be a mechanism for further improvement and there could be obstacles along the way.

According to Jason Lewis, Founder and Managing Director of Limah Design Consultants, these designer brands are so well ingrained into the public mind with defined values, positions and styles, that designing new components to brand takes new consideration. Although rewarding, it is only through careful research and design exploration to uncover the brand essence and then communicate that in new forms.

While Challenges are inevitable in such monumental developments, will the projects eventually pay off in the long run?

Designer-branded Hotels are aligned with the perceived attributes of Dubai. In the Middle East, in general, as well as Dubai, Hotels have been tightly linked with the rest of the social and business community. Therefore, the success of these hotels depends on the extent to which these Hotels can position themselves in the social context that they operate and also on the service infrastructure. While there are many new hotels opening, there is no need to worry about an oversupply of the branded property, as these hotels remain a very limited group within the hospitality industry, said Chibeb Ben Mahmoud. 

Dubai has one of the largest concentrations of 5 star hotels of any major city in the world and one of the highest occupancy rates for hotel rooms.

Sharjah Tourism Body Launches New Hospitality Criteria System

Sharjah has launched a new hospitality criteria system in a bid to boost the emirate’s hotel services, according to a top government official. 

Blue Souq

The Emirate is one of the fastest growing tourism markets in the world with world class infrastructure and services contributing to the nation’s economy. A number of new hospitality and tourism projects are in the pipeline, adding to the Sharjah’s growing tourism infrastructure of world-class luxury hotels, beach resort and business tourism facilities in the emirate, said HE Khalid Jasim Al Midfa, Director General, Sharjah Commerce and Tourism Development Authority.

Corniche

The main objective of the system is to enhance the Emirates’ hotel services and have the latest technology. The Sharjah Tourism will also introduce new methods of gathering information from Hotel Guests.

The emirate attracted one million guests during the first six months of this year, up 14 per cent over the same period in 2013.

Al Qasba

The hotel occupancy rate was approx 74 per cent during the first half of this year while the average occupancy during the same period last year was at 70 per cent. Guests stayed for 1,87,416 nights during the first half of this year – of those 110,621 nights were at hotels and 711,206 at hotel apartments. While 1,753,866 room nights were occupied during the same period last year.

In the first half this year, Sharjah welcomed 369,485 visitors from GCC countries, which currently accounts for 34 per cent of the total hotel guests. Meanwhile visitors from European nations represented 37 percent of the total hotel guests. Visitors from Asia contributed 13% towards Sharjah Tourism market, while visitors from other Arab nations constituted 12 %. The number of international visitors from America, Africa and Asia Pacific contributed 1 per cent each.

Sharjah is aggressively boosting its presence in the UAE hospitality market, with a portfolio of 106 hotels and hotel apartments at present and could see 30 hotels in the next three years, adding 4000 rooms to the existing 10000 rooms.

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