Hotel boom

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LARGE-SCALE: Nakheel has developed some of the biggest projects in the Gulf, most notably The Palm and its iconic Atlantis Hotel Project.

Investors are now committing to major hotel-building projects, with developers including Emaar, Nakheel and Aldar all set to launch large-scale investments in the hospitality sector. Sara Hamdan reports.

Emaar, Nakheel and Aldar have invested billions of dollars in UAE real estate projects helped by the introduction of freehold property status in the emirates of Dubai and Abu Dhabi.

Now the trio are set to transform the regional hospitality industry with plans to add some 55,000 hotel rooms in the UAE alone by 2012.

While the global tourism industry is expected to slow as a result of rising fuel costs and slowing economies in the US and Europe, the Middle East is bucking the global trend, fuelling demand for new hotels throughout the region and across all hotel categories.

Africa, Asia-Pacific and the Middle East are experiencing higher tourism growth rates than the world average, at 5.9%, 5.7% and 5.2% respectively, according to the World Travel & Tourism Council. At the same time, the Americas and Europe are falling below the world average with growth at 2.1% and 2.3 %, respectively.

"Last year, Dubai ran an occupancy rate of 87% and an average room rate of US$258 which is one of the highest in the world," says Joe Sita, CEO of Nakheel's hospitality unit.

"There's a tremendous, unsatisfied demand across all segments of the regional hospitality market, from budget to luxury hotels, which needs to be addressed. With six additional runways for 120 million passengers on the way, additional accommodation is necessary to satisfy continuing demand."

Nakheel, the Dubai-based developer that has put Dubai on the map with projects like the three Palm Islands, is investing approximately US$3.5bn in 50 new properties by 2012. The developer has signed agreements to work with prominent global operators on several major hotel-based projects in the region and worldwide.

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