Why global brands are stepping up their Middle East plans

(Renaissance Dubai)

Middle East hotel development keeps on growing, with both local and global companies stepping up their development plans. The United Arab Emirates has a major pipeline, especially in the mid-market segment. Dubai, in particular, is seeking to triple its annual tourism income to $82 billion by the time the 2020 Expo begins.

“Supply is getting saturated at the top of the market; there’s demand for mid-tier hotels and it fills a gap from the real estate perspective besides being a safer investment," Diane Mayer, a VP at Marriott International working on extended-stay brands Residence Inn by Marriott and Marriott Executive Apartments. 

Midscale Brands

Marriott International expects to open nine properties accounting for 2,000 rooms in the UAE by 2018. Among them, a Residence Inn by Marriott will open in the Al Jaddaf area of Dubai in 2018, and a Marriott Executive Apartment will open in Abu Dhabi in the third quarter of that year. Another Executive Apartment will open in Al Ain in 2020.

Marriott expects to open five properties this year, including a 298-room Renaissance Downtown Hotel, a 315-room, five-star Marriott Hotel Downtown Abu Dhabi, and a 500-room Lapita Hotel, Autograph Collection, inside the theme parks complex of Dubai Parks and Resorts in Jebel Ali. 

At present, Marriott International operates nearly 150 properties across the Middle East and Africa region, representing 9 brands in 19 countries. By 2020 the hotel company will add a further 93 properties and approximately 19,000 rooms within the region for a total of 240 properties and 40,000 rooms.

InterContinental Hotels Group is also looking to step up its midscale Middle East development, and is expecting to see more than 40 percent growth across the region in the next three to five years, with 25 new hotels and 9,658 rooms in the pipeline. Eleven of these hotels are in the UAE, including three InterContinental, three Crowne Plaza, one Holiday Inn, two Staybridge Suites, and two Hotel Indigo hotels. 

Notably, Saudi Arabia has the second largest pipeline for IHG, with one InterContinental, one Crowne Plaza, three Staybridge Suites and one Hotel Indigo in development.

Luxury Development

The upscale and luxury segments are staying strong, of course. Hilton Worldwide previously announced plans to open a Waldorf Astoria hotel in the Dubai International Financial Centre next year. The company has signed a management agreement with Ward Holdings for the property.

Dubai-based Emaar Hospitality, meanwhile, is planning to open a total of 35 new hotels across the Middle East under the developer’s three flagship hospitality brands: The Address Hotels + Resorts, Vida Hotels, and Rove Hotels. Emaar has also signed management contracts for hotels and serviced residence projects in Bahrain, Turkey, and Egypt.

Commenting on Emaar Hospitality’s expansion plans, corporate director Chris Newman said that the developer would open additional properties in Dubai, and sign new management contracts to operate hotels and serviced residences in Fujairah, UAE, and Saudi Arabia.

Last week, Robert Booth, a former CEO of Emaar’s Dubai opera­tions who is now co-managing director of Ellington Properties, his own development firm, said that Dubai needs many more new hotels. “Last year, we had 14.5 million tourist visitors, and that number is going to grow to 25 million in 2020," he said. "To accommodate that tourism growth, you need 5,000 new hotel rooms for every 1 million new visitors you get. For an average size of 200 rooms per hotel, that’s 25 new hotels you need every year to accommodate the increase in tourism.”

Looking to attract 2022 FIFA World Cup attendees, Mövenpick Hotels & Resorts will operate its third property in Doha, Qatar, as of May 1. The 139-room Mövenpick Hotel Al Aziziyah Doha, located in the city’s Aspire Zone, also known as Doha Sports City, will take over the space formerly occupied by the Grand Heritage Hotel Doha. The property, owned by E’EMAR Development & Real Estate Investment, will complement the existing Mövenpick Hotel Doha and Mövenpick Hotel West Bay Doha in the city.

Sources: The National, Hotelier Middle East, Construction Week Online, Trade Arabia