By Staff writer
Mid-market operator conducts preliminary studies into segment of market usually reserved for luxury properties
Mid-market hotel operator Premier Inn has conducted preliminary studies into the possibility of developing a beach hotel in Dubai, a segment of the market traditionally reserved for four- and five-star properties.
The British company, which has a joint venture with Emirates Airline in the region, is currently undergoing a major growth phase in the Middle East, with a pipeline of 12 properties opening over the next three years.
However, while beach hotels are a core part of its expansion plans in its other global markets – India and Southeast Asia – they have no plans yet for one in the Middle East.
Nevertheless, speaking to Hotelier Middle East at a recent roadshow event, David Vely, senior vice president development, Middle East, Africa & South Asia floated the possibility of developing one in Dubai.
“It’s something we’ve not done far, but we could,” he said. “It makes sense. A lot of people come to Dubai on leisure trips, and the beach hotels are not only full, they are charging very high rates. Five star beaches charge a rate that is 30-40 percent higher than five-star [hotel] downtown.
“So why not do something also on one of the new beach developments, where land is a little bit more affordable? Because the problem that we hit quite often is the cost of land. The one thing that his hitting the pace of development is the cost of land.”
He added that the idea had recently come up in discussion with one of its partners in the region, who was keen on developing a mid-market beach hotel.
“Initially we discarded that idea because it was so expensive. The land on the traditional beachfront is way too expensive for a midscale hotel. Then we looked at the new destinations – Deira Islands for instance – which is a little bit more reasonable. Preliminary studies make us think that it could work.
“No doubt about it - the demand is there. There is not a single midscale beach hotel and there is need for that.”
Just over 12 months ago, Dubai Tourism and Commerce Marketing embarked on its drive for more mid-market hotels in the emirate, introducing financial incentives for developers.