Published On: Mon, Sep 28th, 2015

50% of new hotels to be 3-star or lower

Up to 50% of the 3,600 new hotel rooms to open in Dubai in the final months of 2015, will be rated 3-star or lower, according to a report by Jones Lang LaSalle.

“Data released by Jones Lang LaSalle (JLL) revealed that up to 50% of the 3,600 new hotel rooms to enter the Dubai market in the final months of 2015 have a 3-star or lower rating, while competitive room rates are set to rival the luxury market, as 69% to have four stars or less according to research,” said Nadege Noblet-Segers, exhibition manager, Arabian Travel Market.

“This will add much-needed midscale room stock to the emirate’s hotel landscape, where three-star or below room supply only accounted for 29% of total availability in the first quarter of 2015,” she added.

The openings come two years after Dubai Government announced plans to speed up construction of mid-market hotels and waiver the 10% municipality room tax for four years upon completion.

Dubai currently has a total hotel key count of approximately 94,000. This figure is set to rise to between 140,000 and 160,000 keys by 2020 with around 20% set to target the mid-market hotel sector. A host of global hotel brands and local UAE-based operators are targeting the aggressive brand expansion in this area, especially after the latest Knight Frank report.

The study revealed that the Dubai segment showed a year-on-year RevPAR increase of 0.5% during the first quarter of the year, which was driven by an increase in average rate at a time declining performance for the luxury and upper upscale segments. Demand is being driven by a growing middle class in markets such as China, India and Africa combined with budget Generation Y travelers and young families.

In response to the trend, ATM 2016 will give specific focus to mid-market travel in next year’s show, taking place April 25 – 28 at Dubai World Trade Centre

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