One of Dubai’s biggest hoteliers has reportedly claimed the government’s incentives for developers to build budget accommodation are not attractive enough.
Gerard Lawless, the boss of Jumeirah Group, one of the largest homegrown hotel companies in the emirate, told Al Arabiya that the government’s attempts to entice investors into lower-end accommodation had been “relatively mild”.
The government has recognised the need for cheaper accommodation to help it realise its goal of 20 million visitors by 2020 by releasing land plots specifically for three and four-star hotel projects, speeding up the construction permit approval process and waiving the 10 percent municipality room tax for four years upon completion of mid-level projects.
Analysts have warned of an oversupply of luxury hotels in the emirate, particularly after the 2020 World Expo, although a recent Jones Lang LaSalle report showed hotel investors are gradually waking up to the opportunities, with 44 percent of the 3,600 new hotel rooms due to open in the fourth quarter of 2015 rated three stars or lower, compared to only 29 percent in the first quarter.
But Lawless said Jumeirah Group, which owns the Burj Al Arab sail-shaped hotel, had not considered anything under four stars and even that level was recently new under its new brand Venu, which is yet to open its first hotel.
“We haven’t planned right now below four star [hotels],” Lawless was quoted as saying by Al Arabiya.
“I think also, while budget hotels will be necessary, you’ve got to leave it to the market to see how it’s going to go, and the investor market.”
His comments follow those of another top Dubai developer, Khalaf Al Habtoor who said so far the emirate had been able to absorb all new hotels and rather than lowering standards, the emirate should target new markets.
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