Chains aplenty in UAE market

Hotel industry consultant Guy Wilkinson takes a look at the new UAE-based hotel chains announced during the Arabian Travel Market, and how they fit into the growing market.
Chains aplenty in UAE market
By Guy Wilkinson
Fri 01 Jun 2007 12:00 AM

Visitors to the recent Arabian Travel Market in Dubai may have been alternatively over- or under-whelmed (depending on their viewpoint) by the fact that no fewer than three out of the 10 halls this year were dedicated to UAE travel and tourism enterprises, including of course, hotel chains. You've got to hand it to the good people of the UAE, they certainly know how to make a fuss about themselves! And nowhere more than in the hotel sector, in which a whole raft of chains have emerged in recent months, either for the first time or with more properties and a shiny new corporate image.

Since the 1990s, the UAE has given birth to a variety of hotel chains, comprising Al Diar (part of Abu Dhabi National Hotels), Coral International, Danat (part of Abu Dhabi's National Corporation for Hotels and Tourism), Dutco (now Jebel Ali International), Flamingo (also agents for Golden Tulip), Metropolitan (now Habtoor Hospitality), Rotana and Jumeirah International (now, just Jumeirah). With the exception of Flamingo and Rotana, these chains all started as hotel owning companies, before in many cases branching into management of other people's properties. Now, a whole new generation of UAE hotel chains is following this pattern.

Dubai's mid-market, which has been experiencing its best trading conditions ever in the last few years, seems to be a particularly fertile breeding ground for new chains. For example, management of what was once the four-star Howard Johnson Hotel in Deira was brought in-house after a few years at what is now called the Lotus Hotel. Now the owner-operator has created Lotus Hospitality and runs not only the original hotel, but also the Lotus Boutique Hotel and the Lotus Grand Hotel Apartments, both also in Deira. The future Lotus Grand Hotel at the Clock Tower and the Lotus Grand Hotel Apartments at Dubai Marina are in the pipeline, suggesting a move upmarket.

Another mid-market name from Deira, Flora Group Hotels, has grown since 2001 to comprise three mid-market hotels and three hotel apartment buildings in Deira under the Florida or Flora logos. A dry (no alcohol) chain, the owner-operator expects to add four more hotels by 2010 with an investment of AED 250 million (US $68 million).

Top South African chain Protea has joined forces with the UAE's Sharaf Group, famed for its activities in shipping, logistics, manufacturing, retailing, etc, in a joint venture to create a new local brand of dry hotels: Sharaf Protea Hotels. Benefiting thus from local real estate clout and international management expertise, the new company already has six properties under development in Dubai, totalling around 800 hotel rooms and serviced apartments.

Also in downtown Dubai, three serviced apartment operators have emerged, each with three properties and flashy brochures: Al Faris, City Seasons and Savoy. City Seasons is notable for having started with a serviced apartments building in Deira, and progressed to managing conventional hotels in Abu Dhabi and Al Ain.

At the luxury end of the market, Sanctuary, Tiara and Tamani are new chains to be reckoned with. Sanctuary, an Abu Dhabi operator, has three properties coming up in Dubai, Abu Dhabi and Batroun in Lebanon. It promises "grand hotels, magnificent resorts and majestic residences", according to the brochure. Dubai-based property developer Zabeel Investments' new subsidiary, Tiara Hotels and Resorts, has a hotel coming up on the Palm, (which was to have been run by Anantara), as well as another on Sheikh Zayed Road. The company plans to "appeal to visionary travellers who are tired of the formulaic style and service that is common among other high-end hotel groups".

Al Rostamani Enterprises has launched Tamani Hotels & Resorts under the auspices of its KM Holding company, a new Sharia-compliant chain, and will open its first property, a serviced apartment tower at Dubai Marina, later this year, with three others in the pipeline elsewhere in Dubai. "Tamani Hotels & Resorts will be luxurious, stylish and appealing to a wide range of travellers while also respecting the values of Islam. We aim to use Islamic art as a way of communicating our traditions and culture," said Khulood Al Rostamani, co-founder and group director, KM Holding.

These chains are in many ways similar to other groups of hotels owned by the same party, in other Gulf countries.

However, what these UAE companies have done, in addition to adding more properties, is invest heavily in PR and packaging, inspirational corporate blurbs and sexy graphic design.

Maybe this is the essence of hotel chains: like the computers of a science fiction novel, they are self-aware.

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