Expo Effect To Bring 28,000 Hotel Rooms To UAE By 2016

More than 28,000 hotel rooms are expected to open in the UAE by 2016, with half to be built in Dubai, according to a new report.

Starwood Hotels and Resorts, Rotana Group and Accor are expected to bring the largest additions with, 3,800 rooms, 3,000 rooms and 2,600 rooms respectively, according to the JLL Hotel Intelligence UAE report.

Intercontinental (1,800), Hilton (1,800), Millennium and Copthorne (1,700) and Fairmont (1,500), Raffles (1,500) and Wyndham Hotel Group (1,500), will also offer significant additions, with Movenpick Hotels and Marriott International adding 1,100 and 800 rooms respectively.

JLL said increasing air connectivity investor confidence and Expo 2020 would lead to growth in the UAE’s tourism market.

The six month Dubai World Expo event is expected to attract 25 million visitors and be a key driver for tourism, with other emirates also set to benefit, the company said.

Abu Dhabi is expected to account for 31 per cent of additions, with 8,700 rooms in the pipeline.

“There has been an increase in hotel development activity over the last two years due to the encouraging signs in the tourism sector and wider economy,” said Chiheb Ben-Mahmoud, JLL’s executive vice president – head of hotels and hospitality group for the Middle East and Africa.

Increased investor confidence has seen the revival of older projects and new projects announced from international operators trying to increase their hotel footprint in the UAE.

These international players account for 68 per cent, of the Emirates hospitality market and have the largest market share of hotel rooms in the country. Ras Al Khaimah (RAK) has the highest market share of branded hotel supply with 90 per cent of inventory. Abu Dhabi and Dubai have 59 per cent and 73 per cent of branded keys respectively.

In Dubai, hotel guest arrivals have been growing at a compound annual growth rate (CAGR) of eight per cent between 2009 and 2013. Abu Dhabi saw a CAGR of 15 per cent, Fujairah 18 per cent and RAK saw a CAGR of 39 per cent during the same period.

A total of 590 hotels and over 93,000 rooms were added at the end of last year. Dubai and Abu Dhabi accounted for 64 per cent and 22 per cent of hotel supply respectively, while the Northern Emirates constituted 14 per cent of the total current supply.

JLL said it expected demand and supply in Dubai to balance in the short to medium term.