Why Dubai's Landmark Zenath Group prefers four-star hotels

Dubai's Landmark Zenath Group—which owns eight hotels in the UAE, India and Saudi Arabia as well as a few more under development in various parts of the UAE—is avoiding the region's trend of luxury hotels. As a recent profile in Gulf News notes, the company has done well by focusing on four-star hotels.

“We will always remain in the mid-market segment as from an investment point of view,” Group Director Deen Sadiq told the site, noting that ROI is "better and quicker" for mid-market hotels, and that the segment is also preferable for securing financing as it carries less risk. “When there is a down trend, we are able to cope or sustain in a much better way.” Sadia noted that the company's primary model of operation and expansion is on lease and joint venture. “However, for developing, depending on the locality, the total project cost should be 20-30 percent for a budget hotel and 30-40 percent for mid-market hotels.” 

By the end of 2017, Landmark Zenath plans to open five properties under its ‘Landmark’ brand for a combined investment of Dh100 million. Two of these will be in Dubai Investments Park, with a total of 370 rooms. A 185-room property is opening on Shaikh Zayed Road, while a 175-room hotel in Deira is scheduled for 2017. A 246-room venture is in the works for Fujairah. The Group manages all the hotel and properties it develops. 

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The company's funding needs are met through a mix of internal resources as well as by having “strategic investors for certain projects”. “We also arrange funds through banks...but we prefer to opt for Islamic banking,” Sadiq told the site.

Beyond the UAE, the Group is looking to grow in Saudi Arabia, where it already has two serviced apartment properties.