They are building it, but will they come?
The developers of Dubailand have put their money where there mouth is in launching the Bawadi hotel strip — a hospitality project of unprecedented scale. The US $27 billion (AED100 billion) development of 31 hotels has made headlines around the world since being unveiled last week. But will there be enough guests to go around or staff to look after them? Sean Cronin reports.
It stole the show at the annual gathering of travel professionals in Dubai last week. A US $27 billion (AED100 billion) development of 31 hotels built along a 10km strip, was always going to dominate the headlines.
But hospitality consultants are now questioning whether enough attention has been paid to the question of who will run the hotels when they are built and whether projected tourism numbers will justify this amount of concentrated development.
That concern, however, has not impacted on the willingness of investors to pile into the development, according to Tatweer — the Dubai Holding company and developer of Dubailand.
It claimed to have sold 50% of the available plots in just nine hours on the opening day of the Arabian Travel Market last week — representing investment of some $8 billion.
“To achieve investment of AED30 billion in less than nine hours is unprecedented and reflects the credibility and reliability of Tatweer and its offerings,” said chief executive Saeed Al Muntafiq.
Tatweer plans to invest $10.9 billion in Bawadi. It will own and develop 12 hotels on the 10km thematic hotel strip, the longest in the world. The remaining 19 hotels will be operated and managed by other hotel operators.
Bawadi will add 31 hotels to the emirate over the next eight years, nearly doubling the current number of hotel rooms in Dubai. Infrastructure work will start in early 2007, while the centrepiece of the development and the world’s largest hotel, Asia-Asia, will be open in 2010. It will provide 6,500 rooms, combining 5,100 four-star and an additional 1,400 five-star rooms.
It is a massive amount of new hotel capacity to deliver in one go, but that may not be the biggest concern, according to Steve Head, managing partner with London-based hospitality consultant Conseil International.
He says: “Dubai is capable of achieving anything because it has tremendous leadership and confidence. However, to make great hotels and take hospitality to new levels, you need reliable human resources.
“Above all, once the builders are gone, you need stable human capital with which to take forward the dreams of the rulers and government and private and public investors.”
Head recently returned to the UK after visiting Dubai to chair the DEPA Middle East Hotel Awards.
He says that the ability of Dubai’s developers to deliver projects of this scale is not the issue and is already proven in the projects built or under construction.
But he is less sure about the ability of the emirate to either recruit of train sufficient numbers of workers to staff the new hotels that are planned.
“Someone once said, anyone can build hotels — you need the architects, the location and the designs and the collateral.
“But great hotels and zones of hospitality are created by people and what I wouldn’t like to see is a supply that turns into over-supply because there aren’t enough people to run them.”
The Jumeirah group recognised this issue back in 2001, when it launched the Emirates Academy of Hospitality Management.
But Head points out that there is no similar initiative to support the staffing of the thousands of new hotel rooms to be built over the next decade.
“There does not seem to be any initiative for creating large training centres for the people at the leading edge — the waiters, the concierge and the room attendants,” he says.
“Where are these people going to come from and how qualified are they going to be to match the capability of the constructors and developers?”
Within the context of Dubai’s much-publicised target of attracting 15 million visitors by 2010, the massive scale of development envisaged in the Bawadi project is perhaps not as exceptional as it may first appear.
And indeed, the proposed 31 hotels are comfortably catered for within the existing Dubailand masterplan, according to Gavin Samson, associate director at consultant TRI Hospitality Consulting.
He says: “From what I know of Dubailand, and we have done quite a bit of work on projects there, this announcement didn’t come as much of a surprise because in the master-planning guidelines for the project, there is space for around 50 hotels — so Bawadi takes care of 31 of those.”
There are currently around 28,500 hotel rooms in Dubai with a projected requirement of around 110,000 rooms to satisfy the demand created by the arrival of 15 million visitors.
Viewed from this perspective, the Bawadi announcement should not necessarily be seen as being too much too soon, according to Samson.
Dubai-based hotel consultant Guy Wilkinson, also says the level of development planned for Bawadi is consistent with Dubai government projections:
“There is an under supply of rooms in Dubai at the moment so obviously there is a need for more. The question is, how much? The Dubai government has set a target for 80,000 more rooms, to accommodate its target of 15 million tourists.
“But will there be 15 million tourists by 2010? There is not very long to go before we reach 2010, bearing in mind that for 2005, Dubai clocked six million arrivals.”
But according to Samson, the question of whether there will be enough sufficiently well-trained staff to go round, is less straightforward:
“In terms of the human resources to staff all the hotels, that is a more difficult question to answer. It’s going to be a huge challenge, like finding enough construction workers to work
on the project.
“The same applies to hotel staff and I guess the worry is the levels of standards and training.
“At the moment Dubai is perceived very positively and the standards of service here are very good compared to the rest of the world.
“As the industry grows, it is very difficult to hypothesise and say whether Dubai will be able to maintain the same standards. I would hope so but inevitably as we move towards more of a mass market destination, it becomes a tough one to answer.”