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Dubai hotel boom is set to continue

Dubai’s hotel and hospitality industry has room for another five years of growth before reaching its limit. That’s according to Andrew Hendrian, general manager of the Hyatt Regency Dubai

Dubai’s hotel and hospitality industry has room for another five years of growth before reaching its limit. That’s according to Andrew Hendrian, general manager of the Hyatt Regency Dubai.

In an exclusive interview with Hotelier, Hendrian maintained that the tourism industry is growing, with every major hotel player currently getting a slice of the action, but this can’t possibly continue indefinitely.

“It’s always the case when there is a cake and there are 10 people eating it,” he said. “You have 10 pieces of cake but if there are 20 people then the slices of cake get thinner, unless the cake gets bigger, which has been the case in the last four or five years here in Dubai.

“And this I can imagine will grow in the next four to five years, but I think after five years there is a limit to tourism, like in Mallorca in Spain."

Hendrian said development would be limited by space restraints and that the customers’ hotel selection would then boil down to location and the customer service provided.

“[When space becomes limited], that’s when the competition really starts because you have so many hotels and the cake won’t grow any bigger,” he said.

“Competition like that can only have a positive effect. It forces you to offer services which are different from other places, which offer value for money and where a customer feels he’s getting something for the money he’s paying.”

Hendrian noted that hotel room rates, which have seen a rapid increase over the last few years, would also reach a limit within five years. “We have reached a level now where the rooms are as expensive as certain parts of Europe,” he said.

“Having said that, the standard of living is still about 60% of the prices you’d pay in Europe. But if this gets more expensive, people will prefer to go to Spain or the south of France — you save flight time and it just wouldn’t be worth flying here,” he added.

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