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Report
Cites Impressive Figures
Dubai
is expected to see an estimated 18,000 to 20,000 more
hotel rooms by 2010, an increase of almost 100 percent
on the number of rooms currently available, fuelling
the risk of oversupply, according to a recent report
entitled, "The Dubai hotel market. Hot or soon
to overheat?" prepared by international consultants,
HVS International in late 2005.
But
although these figures look alarmingly large, there
is good reason to think that Dubai will be able to absorb
such a large increase in rooms.
The
report states that given the historical growth in hotel
demand, the forecast public spending on tourism in the
emirate, and the current and future projects that are
being developed in Dubai, "we expect demand to
experience an average annual growth of 7-10 percent
over the next five to 10 years."
Photo by Rashid Shah ....
If
growth were to continue at such levels "this could
imply that demand growth is likely to catch up with
supply over the next few years," states the report.
Current occupancy levels which approach 90 percent could
by 2010 stabilize at 70-75% which is comparable to what
is seen in some of the U.S.'s strongest markets like
Orlando, Florida and Las Vegas, Nevada.
Moreover,
because Dubai has a stronger economic base than most
other hotel market destinations in the Middle East,
and the emirate benefits from possibly the best tourism
infrastructure in the region, "this might, in turn,
reduce the negative impact of the new supply,"
the consultants stated.
At
the other end of the spectrum, significant opportunities
are believed to exist in the emirate for the development
of branded limited service or three- -star hotels. Other
investment opportunities in Dubai are also believed
to lie in developing extended stay and timeshare properties,
condo hotels, fractionals and other types of shared
ownership properties.
Photo by Rashid Shah ....
A
greater volume of international capital, notably from
Asia and Europe, is forecast to flow into Dubai's hotel
industry.
Europe
is the main feeder for the five-star hotel market in
Dubai, accounting for 47 percent of total demand.
The
GCC and non-GCC Arab countries, account for another
27 percent.
Published plans also exist to attract the Turkish, Pakistani,
Indian, Chinese and Iranian markets over the next three
to five years. The government is also working on developing
the cruise market to Dubai.
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