UAE hospitality on a roll

Led by Dubai, the UAE's hospitality industry will continue to see massive developments over the next few years which will put further pressure on the smaller players which are already strained due to stiffer competition from the bigger players on the price front, according to industry players.

"Previously price was associated with the star rating and that line has been rubbed off now. We are seeing a lot of 4- and 5-star hotels selling at 3-star rates. So one wonders how this impacts performance and profitability of 5-star hotels if they are going to sell at 3-star rates. Occupancies are softening here and no doubt that will continue to be the case. Hence it is going to be extremely challenging for smaller hospitality players to bear this pressure," said Russel GH Sharpe, chief operations officer of Citymax Hotels.

He said the hospitality landscape in the UAE is definitely getting very competitive. 2020 has been a huge accelerator for expansion of hotels, however, the market is still not fully developed to absorb such a high rate of increase in room supply.

According to BNC Network figures shared exclusively with Khaleej Times, Dubai leads in active hospitality projects in the UAE with 370 properties worth $40 billion (Dh147 billion) out of 543 projects across the UAE with a total value of $71.6 billion (Dh262.77 billion).

Source: Khaleej Times