Concerns within the hospitality industry of an impending oversupply in Dubai’s hotel market over the next few years are overblown and misunderstood, according to Tim Cordon, Radisson Hotel Group’s senior vice president for the Middle East and Africa.
Speaking to Arabian Business, Cordon said he’s “not totally convinced’ by arguments that Dubai’s market is oversaturated.
“There’s still opportunity in Dubai,” he said. “I think there’s still opportunities for select hotels with the right brands and the right operating model to do really well in Dubai.
”It’s still a market which has high-occupancy year rounds and pretty strong room rates when compared to international markets,” he added.
This year Radisson plans to open four hotels in Dubai, including the 206-key Radisson Blu Hotel Dubai Canal, the 171-key Radisson Red Hotel and Apartments in Dubai Silicon Oasis, 481-key Radisson Hotel Dubai Damac Hills, and the 253-key Radisson Blu Hotel Apartments in Al Sufouh Gardens.
Cordon said he believes perceptions of oversupply stem from the fact “that we’ve been opening hotels more quickly than the number of visitors that has arriving has grown.”
“We’ve grown supply more quickly than demand, so that leaves people to comment that there is oversupply,” he said.
“But if we want to make a success of 100,000 rooms every day, we need to be able to market Dubai as a mass-tourist destination.
“We need to be on the list of destinations that are affordable, accessible and sensible. But up until the last couple of years, the average rates in Dubai and the demand that we had here were so strong that it kind of priced us out of the international market,” he added.
Cordon added that the market is now going through a “correction” in which rates are coming down.
“We’re seeing now a rate that is more competitive on an international level, and that has its own pain points,” he said. “We need to recognise that we need to be smarter and more efficient in how we run businesses, so that we have a lower cost base.”
Additionally, Cordon said that he is unconcerned by oversupply following the end of Expo 2020 Dubai, saying that the event marks an important milestone “on the way to a developed market.”
“I don’t think that Expo is the end of the line,” he said. “It will drive uptick in demand, and that’s great news. But what’s more important is the legacy that leaves. If it opens Dubai to new markets and visitors that hadn’t considered us before, then that will be success of Expo 2020.”
Radisson currently has 13 operational hotels in the UAE, including two that opened in Abu Dhabi earlier this year.
Around the wider Middle East and Africa region, the hotel plans to open another 50 hotels with a total of 13,000 rooms, bringing its total portfolio to more than 100 hotels and 24,000 rooms.For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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