Differentiation needed in Dubai hotel market, says JLL

04 May 2010

Dubai is one of several cities in the Middle East whose hotel sector is performing well compared to the rest of the world, but the emirate still faces challenges as it seeks to recover from the downturn, according to Mark Wynne Smith, CEO Europe, Middle East & Africa at Jones Lang Lasalle. The threat rests in how many rooms are scheduled to come online, as the large number of projects that are still under construction rely on a buoyant economy to provide the guests, he warned. Another major concern is the number of luxury and super luxury hotels that are coming onto the market. 'There is a lot of the same that has been built recently in Dubai, whereas Abu Dhabi has gone for more of a differentiation,' he noted. I think developers need to keep recognizing that it they continue to build in the luxury segment they will reach the end of the demand pool quicker than if they look lower down at the demand tiers. So I think the grand plan over the next five years should be to achieve more differentiation.' Despite the potential pitfalls ahead, the current picture in Dubai remains relatively positive. 'The occupancy that this city is achieving compared to the rest of the world is extremely good, so although it may be down it is still very respectable,' he noted. 'Compared to some of the other key cities in Europe which are struggling to achieve 50% occupancy at the moment, there isn't a problem here. To see how resilient Dubai has been compared to other markets sends a very strong message about the future of this city.'

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