Kuwait's Action Hotels plans hotel for Dubai Media City

IBIS Hotel
IBIS Hotel

Action Hotels has one other Dubai property: a four-star ­hotel under construction in Dubai Healthcare City on the other side of the emirate, close to Sharjah. It owns a Premier Inn property in Sharjah and is developing ­other UAE hotels, including a Tulip Inn at Ras Al Khaimah and a Staybridge Suites in Abu Dhabi.

Charles Bott, the head of hotels, hospitality and leisure at the property consultancy Cavendish Maxwell, told The National that branded, budget and mid-market hotels in the Middle East were a "relatively new phenomenon," but there has been a surge of investment in them, possibly due to the region's higher-than-average daily room rates and occupancy levels. He added:

“A second factor is the high number of Middle East business guests who have come to believe in the importance of brands.  Luxury hotels have educated the market to like brands.” 

Budget hotels also tend to be more profitable than five-star properties as they cost less to develop and have more resilient occupancy levels in times of a downturn, Bott added. “Worldwide trends show that a return on investment for a five-star hotel would take–on average–between seven and nine years, compared to the return on a budget hotel of five to six years.”