Mid-market hotels in demand in Dubai

Deen Sadiq, group director at the Landmark Zenath Group.

The Landmark Zenath Group is planning to expand its hotel business in the UAE as the hospitality industry in Dubai has exhibited strong performance compared to other markets in the Middle East, according to its senior official.  
Deen Sadiq, group director at the Landmark Zenath Group, said five more properties will be launched to increase the room keys by almost 100 per cent in next two years due to promising outlook of the industry and growing demand of affordable hotels across the emirate.     
"We are planning to expand to five new properties in the near future from three to 24 months with a capacity of adding another 900 rooms," Sadiq told Khaleej Times during an interview.
Elaborating, he said two properties will be located in the Green Community at Dubai Investments Park along with one property on Sheikh Zayed Road and another one in Fujairah along with one property in Deira.
"We are also getting enquiries on managing few properties in the region, which we are evaluating," he said. The Landmark Zenath Group is a UAE-based multidisciplinary conglomerate with a 20-year track record of success in various industries encompassing F&B, hospitality, real estate, media, and engineering.
High occupancy
Landmark Hotels & Suites is the hospitality division of the group and it launched first non-alcoholic hotel in 1998. Currently, it operates five properties in the Dubai and two hotel apartments in Jeddah, Saudi Arabia.
"The five Landmark properties in Dubai including the Landmark Grand Hotel, Landmark Riqqa, Landmark Plaza, Landmark Baniyas and Ramada Deira along with two other properties in Jeddah consist of 1,000 rooms in total," Sadiq said. About the occupancy level and performance of these properties, he said all hotels maintained high occupancy due their strategic locations close to metro stations and high tourist influx in Dubai.
"We have always maintained an average of 90 per cent plus occupancy throughout the year.  This has been a good year for our business and we're expecting occupancy levels to rise by a further five per cent in the coming months," he said.
Non-alcoholic hotels
Sadiq said non-alcoholic hotel concept gains popularity across the globe with increasing population of Muslims and more interest of the community in travelling.  
"On a global scale, the Muslim population is growing very rapidly and is expected to hit 26.5per cent of the world's population by 2030. This rapid growth comes at a time when the sector's interest in travelling is also increasing tremendously owing to better levels of education, as well as sizeable disposable incomes," he said. 
He said the UAE will certainly benefit from this growth, especially since the emirates has been ranked as the third most favorite destination in the Global Muslim Travel Index of 2015. With this influx of tourism comes, he said not only the need for halal dining, but also the necessity for non-alcoholic hotels that cater to the values and sensibilities of Muslim guests in particular.
"Our hotels also cater to non-Muslim families, couples and executives. Whichever country we decide to operate a hotel, we will always follow the dry hotel model, as we're not only confident about running the operations smoothly but we're also aware of the potential of the dry hotel segment.
To a question, he said Landmark Hotels & Suites' biggest tourist markets include Saudi Arabia, India, UK, Iran, Nigeria and Russia and the group is expecting an increase in its business from these markets in the future.
"The growing number of Muslim travellers bode well for non-alcoholic hotels. They are expected to make up 11 per cent of the global travel segment in 2020 and this percentage is a lot higher in the Middle East.  But of course, we will benefit overall since we also cater to the non-Muslim segment."
Demand for mid-market hotels
Sadiq said the hospitality industry is traditionally dominated by luxury and up-market deluxe establishments. But now more than ever, the regional trends are turning towards the travellers seeking a comfortable accommodation at a reasonable price.
"Dubai is seeing a shift towards the development of mid-market properties, underpinned by government incentives, a growing middle class in key source markets and the rise of a younger, more cash constrained guest profile. Strong demand for branded mid-market hotels has also helped to support average occupancy levels which are above market wide averages," he said.
Referring to a report released by Knight Frank, he said the hospitality industry in Dubai has exhibited strong performance in relation to other markets in the Middle East despite a drop in key performance indicators. He said Dubai remains among the leading markets in the region despite year-on-year revenue per available room fell by seven per cent in first quarter of 2015.
Referring to real estate investment and advisory firm Jones Lang LaSalle, he said 27,000 additional rooms will be coming into Dubai's hotel sector during 2015-2018.  "The emirate is projected to see an addition of 4,700 rooms to its 64,200 keys in 2015 alone. With such optimistic predictions the region is preparing for a so called hospitality boom, and the future surely looks bright for the industry as a whole," he said.
World Expo 2020 impact
Sadiq said hosting World Expo 2020 will have a significant impact on the UAE tourism industry.
"Dubai is set to add 20,000-35,000 mid-market keys by 2020 to its hotel offering [nearly 30 per cent of hotels will be in the mid-market category], now dominated by five-star hotels, which have a market share exceeding 60 per cent," he said.
He said it is estimated that 25 million people will visit Expo 2020 in just six months, of which 70 per cent will come from outside the UAE. The projected arrival of such high tourist numbers is certainly a major boom for the hospitality industry.
"Expo 2020 will be responsible for providing the dynamic city of Dubai with world-class venues for massive conferences that match the likes of popular international destinations for meetings, exhibitions and conferences, creating numerous lucrative job opportunities not only in this sector but also other allied industries.
"This is over and above the fact that Dubai is already the fourth most visited city in the world among international travellers, according to the findings of the MasterCard Global Destination Cities Index, with this trend constantly steering up the curve."
Airlines to play key role
Sadiq said Emirates and flydubai will play an integral role in projecting Dubai as the host city around the globe and have the opportunity to bring millions of visitors to Dubai to experience the Expo 2020.
"Emirates and flydubai, the two biggest operators at the Dubai Airport, are anticipating to fly more than 70 million passengers by the time of Expo 2020," he said.
"On the other side of the equation, tourists are also going to benefit from the increased investment in the hospitality sector with new hotels, more rooms and services, which will provide them with more options and better value," Sadiq concluded.
- muzaffarrizvi@khaleejtimes.com

• Dubai