Damac is looking to grow in markets with a 'dire-need' for mixed use properties but will remain out of the mid-market hospitality space
Damac’s new hospitality chief has said opportunities beyond the UAE could be ideal to build the real estate developer’s hotels and resorts portfolio.
“We are looking in the UAE of course, but worldwide as well, especially in any of the neighbouring countries such as Saudi Arabia, Oman and Lebanon, all countries which are either under reconstruction or in dire need of quality mixed-use developments,” said Jen Faivre, senior vice president, hospitality at Damac. “Damac’s core business is mixed-use developments.”
Appointed in January this year, Faivre was speaking with Arabian Business about the company’s plans to grow its hospitality unit to reach 15,000 keys by 2021.
A 40-year Hilton and IHG veteran, Faivre is leading Damac’s hospitality subsidiary in which the Dubai-based developer, as well as DICO, founder Hussain Sajwani’s private investment vehicle, are the largest shareholders.
“Tripling in the next 18 months the 1,700 rooms we built over four and a half years means we are reaching critical mass in our space,” added Faivre.
“Dubai needs 40,000 keys before 2021, and we have two properties in Riyadh, Saudi Arabia, one on the Marina and one on the waterfront. This we will add to in the region. So as long as we are fast, extremely agile and have the right entry price, we will succeed.”
“We need to be aggressive and agile and go after the right opportunities,” said Faivre, hinting at how the company would look to grow its hospitality portfolio.
“Damac used to be all residential before becoming a leader in serviced apartments. Growing the hotel business will help keep customers within the Damac brand.”
However despite wanting to be agile, Damac isn’t lending serious thought to a mid-market proposition that is gaining ground in Dubai’s hospitality space.
“The mid-market has 22,000 rooms and 260 hotels in Dubai alone. Upscale four and five star have about 110 each. So we will continue to look at the latter luxury market,” he said.
“I’m not saying there is no room for it, but you have a lot of operators and big names. They have a huge critical mass of brands in the category. If there is an operator that wants to do 20 hotels then maybe we’ll look at it.”
By the end of 2018, Damac’s hospitality unit is looking to have developed 5,546 including its flagship development on Al Khail Road to be operated by Paramount hotels and Resorts.
“It will be our first true hotel managed by an international operator. We expect it to be complete between the fourth quarter this year and first quarter next year,” said Faivre.