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.