Rising demand calls for more three-star hotels

DUBAI — The rapid expansion of tourism and real estate markets in the UAE in recent years have been fuelled by a growing number of mixed-use development projects, incorporating hotel projects.

By Moushumi Das Chaudhury

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Published: Sun 24 Jul 2005, 10:29 AM

Last updated: Thu 2 Apr 2015, 4:43 PM

Although Dubai has more than 370 hotels and serviced apartments, the hotel occupancy index revealed that Dubai ranked first in 2004, according to a report by Deloitte.

The city received 5.42 million visitors and growth accelerated to 11 per cent in the first quarter of 2005 with the arrival of 1.6 million visitors, according to the Department of Tourism and Commerce Marketing (DTCM).

Statistics showed that Dubai needed more hotels and apartments, especially three-star hotels as there were more five-star hotels already established in the emirate and more five-star hotels were coming up. Moreover, the four-star and three-star are hiking their room occupancy prices in response to the boom in the market.

This month, the government-owned Dubai International Capital announced that a new firm Ishraaq, would launch more than 20 Express by Holiday Inn hotels in the next four years and fulfill the requirement of three-star hotels in the country as three star hotels are the fastest growing segments in the region.

Industry sources termed the four-star hotel segment insubstantial in size, with not enough inventory to satisfy the call from five-stars for support and there was room for a three-star segment to grow throughout the region.

Recently, Al Murooj Rotana Hotel and Suites located at Shaikh Zayed Road opened its first phase, the serviced apartments and Emad Elias, senior vice-president, Rotana Group told Khaleej Times: "The demand for five-star hotel accommodation within the city is tremendous and all our apartments and hotel rooms have been booked and although Rotana Group's is offering 600 rooms in Villa Rotana Suites and Al Marooj, still there will remain a major gap in the market that will hard-hit around September.’’

He also added: “In September, the demand will escalate due to business activities, increased traffic through regional airlines network expansions, the heightened tourist market and several major trade exhibitions set for that month.’’

Emad Elias believes that the occupancy market will continue to look bleak for Dubai until the delivery of hotels on the Palm project and at Festival City to alleviate the pressure.

He suggested that, apart from these five star properties, Dubai immediately requires three-star hotel brands, which will offer very high standards that travellers into the region have come to expect, yet at reasonable prices.

He concluded: "The majority of travellers would choose from this potential high yield niche and the Rotana group will come with high benchmark standards that will be attractive to travellers at more economical prices."

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