10,000 Dubai luxury hotel rooms 'need revamp'

EC Harris estimates cost of renovation at AED325,000 a room in new report
(Photo for illustrative purposes only)
By Andy Sambidge
Fri 27 Sep 2013 10:55 AM

More than 10,000 five-star hotel rooms in Dubai are in need of refurbishment, placing significant burden on hotel operators as they consider taking rooms out of operation to undertake the necessary work, a new report has said.

EC Harris, the global built asset consultancy, estimates that the cost of renovation is in the region of AED325,000 per room.

There were an estimated 23,500 five star rooms in Dubai in 2012.

Christopher Seymour, head of property UAE at EC Harris said: "Some of the hotel assets in Dubai are now over 15 years old and to maintain the quality of the offering, protect the brand and meet customer expectations, refurbishment programmes are becoming a requirement.

"The quality of the hospitality accommodation in the UAE is very high and with the wave of new hotel construction in the pipeline, we will see some operators forced to undertake refit and refresh of their older hotel assets in order to remain competitive."

He said refurbishment programmes should be targeted at quiet periods to reduce the revenue effect of taking rooms and facilities out of operation.

However, that quiet period is seen to be reducing as the appeal of Dubai as a destination increases. Most operators now view the only 'window' as late May to early September - a period of just 14 weeks.

Seymour added: "Careful planning and programme management are very important to ensure success. Using tried and tested processes from the busy tourism markets of Europe and North America demonstrates that it is feasible to carry out major hotel refurbishments whilst remaining in operation."

Sheraton Dubai Creek Hotel closed in July and is scheduled to reopen next spring as it undergoes an extensive refurbishment.

The hotel announced that it is undergoing a full refurbishment of all guest rooms, the Vivaldi restaurant and other facilities in the hotel.

Dubai hotels posted big increases in occupancy and revenues during August compared to the year-earlier period, according to data released by STR Global.

The city's hospitality sector witnessed increases in supply (5.81 percent) and demand (30.4 percent) while occupancy rose 23.3 percent to 72.6 percent.

STR Global also said hotels reported a 8.7 percent increase in average daily rate to AED753.16 and a 34 percent rise in revenue per available room to AED546.61.

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