Al-Futtaim wins contract for Dubai World Trade Centre hotel

Hotelier Middle East is reporting that the Dubai World Trade Centre has awarded British firm Al-Futtaim Carillion the main contract for first-phase delivery of the Dubai Trade Centre District (DTCD), a 146,000-square-meter development to include a 588-room hotel.

Phase one of the development, located between the current Dubai International Convention and Exhibition Centre and Emirates Towers in the city’s Central Business District (CBD) is set to begin next month with a scheduled completion date of Q3 2015.

The contract is worth approximately AED375 million, and an operator for the hotel will be announced in the coming weeks.

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This development is the latest step in Dubai's efforts to double its hotel room capacity by the time it hosts Expo 2020. As the Daily Star noted, the emirate cut down the period required for preliminary consent from as many as six months to two months and established a one-stop approval center for developments. Government land for developers of three- and four-star hotels will be granted on “favorable” terms, the DTCM said in January.

Officials want to boost the supply of more affordable hotels to cater to business travelers and families. About a third of Dubai’s 85,000 rooms are in luxury hotels, and the officials have offered to waive fees if landowners change development plans to build cheaper accommodation, and as much as a five-year exemption from a 10 percent fee on revenue.

To help fund the promotion of Dubai’s tourism and trade industries, it will impose a tax as high as 20 dirhams ($5.45) per room for each night, depending on the hotel category, starting March 31.

STR Global’s preliminary February data for Dubai indicates positive revenue-per-available-room growth.

Based on preliminary daily data, the emirate reported:

* increases in supply (+6.3 percent) and demand (+7.1 percent);
* a 0.7-percent increase in occupancy to 88.6 percent;
* a 10.7-percent increase in average daily rate to AED1,102.78;
* an 11.5-percent rise in RevPAR to AED977.12; and
* a 3.8% increase in RevPAR is expected in 2014.

“Growth in demand was able to outpace the continuous growth in supply, resulting in the highest occupancy levels of any February since 2007 for the market”, said Elizabeth Winkle, managing director of STR Global. “ADR, however, was driving double-digit RevPAR growth in this month, and rate is expected to heavily influence positive hotel performance for the remainder of the year”.

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