New hotel builds set to continue apace in UAE
55,000 rooms to come online in next five years
Latest figures out from Jones Lang LaSalle Hotels have revealed that 55,000 four- and five-star hotel rooms are expected to come online in the UAE in the next five years.
Dubai continues to lead the market, with the confirmed development of more than half of all projects —many of which form part of the Bawadi project at Dubailand, followed closely by Abu Dhabi.
“Last year, the confirmed pipeline of projects that were under construction or in advanced stages of planning stood at approximately 35,000 rooms.
“During the course of 2006 we have seen an increase in new development schemes emerging to meet the rising tourism and business travel requirements in the country,” said Arthur de Haast, Global CEO, Jones Lang LaSalle Hotels.
According to Thierry Loué, managing director of Jones Lang LaSalle MENA, this sudden growth is being driven by “an abundance of capital seeking real estate, strong market fundamentals, significant growth in intra-regional travel, and greater awareness of Dubai and Abu Dhabi as tourist destinations.”
Once again the parallels are being drawn between Dubai and Las Vegas, with the Nevada State city boasting the world’s second largest hotel development pipeline with 42,000 rooms, Macau follows with 27,000 rooms and Shanghai and Beijing with just 11,000 and 12,000 respectively.
In addition to the significant investment in the country, rapidly increasing outbound capital flows from the Middle East are also expected.
Middle Eastern investors, primarily from the UAE, invested just under US $1 billion in European hotels in 2005.
In 2006, the same level of investment in the first half of the year alone has been observed, with Middle East investors eager to explore opportunities in Asia and Europe.
“Traditionally, Middle Eastern investors have always been primarily attracted to iconic trophy hotels. Now, however, the more sophisticated Middle Eastern investors are competing for assets across the entire hotel spectrum and sometimes teaming up with the major international private equity firms in order to acquire large portfolios of assets,” de Haast explained.
“Their activities outside the Middle East are also causing foreign investors to look again at the region and we are starting to see signs of foreign interest in inward investments,” he added.