Capitalizing on the UAE’s powerful growth momentum, HMH – Hospitality Management Holdings has set in motion an aggressive expansion strategy in the emirates with a target to triple its inventory of rooms in UAE by 2020. Speaking at the Arabian Travel Market (ATM) today, the group’s CEO, Laurent A. Voivenel said, “We are in the process of negotiating several exciting projects in the UAE that will boost our existing inventory of keys by three times in the next five years”.
The UAE is at the moment the most promising and attractive ground for hotel development in the Middle East and Africa. It currently has the largest inventory waiting to come on stream with 40,102 rooms in confirmed pipeline. Laurent stressed, “The fact that Dubai overtook London Heathrow as the world’s busiest airport proves its, and the rest of UAE’s, strong tourism potential. Hotel investors as well as operators realise it and are eyeing opportunities for long and medium-term returns. HMH is the most credible and leading chain of Halal-friendly hotels operating across the MENA region that places us in a very strong position”.
HMH CEO – Laurent A. Voivenel ATM 2015
“Given the growth prospects, the UAE is our prime focus for expansion. Over the next five years our strategy is to triple our market presence in the country through organic growth. Currently we have some exceptional landmark properties in various parts of the emirates such as The Ajman Palace Hotel, Coral Beach Resort Sharjah, Coral Deira Dubai and EWA Dubai Deira Hotel. To tap further into the emirates’ high growth potential, we have identified a number of projects in strategic locations that we expect to materialize soon”.
The hotel sector is certainly benefitting from the resurgent economy as Dubai Counts Down to 2020 and the city’s skyline continues to evolve with a plethora of new hotels. Dubai is targetting to welcome 20 million visitors a year by 2020 while at the same time aiming to triple the revenues tourism contributes to the country’s GDP. It expects to generate Dh300 billion in tourism revenues by that year. Reaching this target requires an annual growth of nine per cent and over the last five years Dubai has averaged 8 per cent growth, with an increase to 9.3 per cent in 2012 – when the emirate welcomed more than 10 million visitors for the first time.
The current trends look very encouraging. According to Airports Council International, 70.5m international passengers passed through Dubai Airport in 2014, against Heathrow’s 68.1m. Dubai’s numbers have roughly doubled since it entered the global airport Top 30 just seven years ago, and increased nearly sevenfold since 2000.
Among oil-producing countries, the UAE is the second largest economy in the Middle East and is the perfect example of diversification. Over two-thirds of its economic output now comes from non oil. And most of it comes from the Emirate of Dubai.
HMH CEO – Laurent A. Voivenel
Laurent believes, if Dubai is to reach its target of 20 million annual visitors, it will need to diversify its accommodation options with development of more mid-market hotels to attract budget travellers. HMH is scouting for opportunities for its budget brand ECOS Hotels. He said, “Looking at the market conditions there is a near saturation when it comes to luxury hotels. The market does not need any more luxury hotels at this point. Therefore, every single operator is looking at how they can attract the future market meaning the market of tomorrow i.e. the middle class. This is why at HMH we have three brands out of five targeting middle class because the middle class that today represents 2.5 billion will by 2025 represent 5 billion around the world. Given the staggering demand we see massive potential for ECOS Hotels that is a ‘no frills’ B & B brand tying together a unique economical and ecological concept. It is a smart choice for investors offering strong investment opportunity because of lower construction and operating costs and quick and high return on investment.”
Laurent continued, “Dubai has developed very well over the last two decades and has multiple demand drivers that has positioned it as a leading leisure and business destination globally. Looking ahead it is only getting better with the city adding more new attractions such as branded theme parks and shopping malls, etc. Massive expansion of airlines including extraordinary growth of low cost carriers has opened new routes and markets thus bringing in more mid-market travellers. Therefore, Dubai will continue to hold strong beyond 2020.”