World’s largest hotel set to open in Dubai by 2016
Dubai’s quest for world supremacy in the tourism stakes saw the emirate announce ambitious plans for the development of the world’s largest hotel at last month’s Arabian Travel Market (ATM).
Dubai’s quest for world supremacy in the tourism stakes saw the emirate announce ambitious plans for the development of the world’s largest hotel at last month’s Arabian Travel Market (ATM). Tatweer, a division of Dubai Holdings, unveiled the Bawadi project, a US $27.2 billion hospitality and tourism development set at Dubailand, at the travel trade show.
Bawadi will add 31 hotels to Dubai, including the record-breaking 6500-room Asia Asia hotel, over the next eight years, nearly doubling the current number of hotel rooms in the emirate. The Bawadi district will add 29,200 rooms to the city’s hotel inventory by 2016.
Bawadi was the largest ATM announcement for Dubai, but there were plenty more new projects fighting for attention. Emirates Hotels & Resorts unveiled its latest hotel project, the 77-storied twin tower Emirates Park Towers Hotel & Spa, while Minor International announced it is to debut its Anantara hotel brand in Dubai, with a five-star resort on the Palm Jumeirah Dubai and a business hotel at Jumeirah Lake.
However, the question being asked by industry experts is, is the demand really there to justify all these new hotel announcements? Obviously the hotel chains think there is, as William Heinecke, CEO, Minor International, told Hotelier Middle East: “Dubai needs additional rooms. It is too difficult to get into Dubai right now. Occupancy is high, and so are the rates.”
However, hotel industry consultant, Guy Wilkinson is hedging his bets on whether or not the predicted supply will match the mammoth number of rooms set to come online.
“There is an under supply of rooms in Dubai at the moment so obviously there is a need for more. The question is, how many? There are at least 25,000 firmly committed hotel rooms to be developed outside Dubailand, 25,000 in Dubailand and 30,000 in Al Bawadi. The Dubai Government has set a target for 80,000 more rooms, to accommodate its target of 15 million tourists by 2010, so from the government point of view development is on track. The question is, 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 reached six million arrivals,” Wilkinson points out.
At present, hotels in Dubai are leading the world in RevPAR and occupancy, and while there is foreseeable demand for some additional hotels, in a couple of years’ time there will be a market correction. Elie Younes, director, HVS International – London, and co-author of the report, The Dubai hotel market – hot or soon to overheat?, predicts that the market will start to correct itself by 2008, if not before, although it will not stabilise until 2012. “Depending on the price elasticity of the leisure market, this [correction] may start earlier,” he said.
Wilkinson agrees: “There will be an interesting situation between 2008– 2010. We will see hotels offering better value packages, cheaper rates, add ons, and may even see some hotels offering rates during the summer months that are effectively three-star rates. Once you have 20 of the Dubailand projects up and running, and promoting themselves it will be a different picture. There will be a gap of a few years before that makes sense, during which time hoteliers will need to tighten their belts waiting for the feast to come.”