Abu Dhabi expects to get 2,400 new hotel rooms this year, as exhibitions drive demand in the capital.
The emirate reported an 11 per cent increase in hotel guests through May, compared to the same period last year, consultancy JLL said on Wednesday in a report ahead of the Hotel Show Dubai next month.
The Abu Dhabi Tourism and Culture Authority is yet to release tourism figures for the first half of the year.
The addition of thousands of new rooms is putting pressure on room rates.
Abu Dhabi-based National Corporation for Tourism and Hotels (NCTH) reported a 1.6 per cent year-on-year drop in its first-half group revenues.
The company attributed the drop to the absence of the five-day, biennial defence exhibition Idex, which took place in February last year. Idex attracted 101,000 visitors and 1,200 international and local companies.
NCTH posted Dh410.9 million in revenues during the first six months, a drop from Dh417.8m during the same period last year. Its hotels division posted revenues of Dh149.9m during the first half, a drop from Dh161.4m during the first half of last year.
The Abu Dhabi-listed company owns properties that include the Abu Dhabi InterContinental and Danat Resort – Jebel Dhanna.
Abu Dhabi had 24,353 rooms from 104 properties at the end of May, according to research company STR.
The supply of hotel rooms and slowdown in the regional economy owing to low oil prices is also hurting the hotel sector, according to Desmond Hatton, the general manager at Dusit Thani Abu Dhabi.
“The overall demand to the destination Abu Dhabi in terms of both leisure and business travel is not proportionate to this extensive supply of hotels,” Mr Hatton said. “There is always an opportunity to further boost the marketing of the destination as a whole towards fostering the demand.”
New hotel openings this year include the 428-room Grand Hyatt Abu Dhabi Hotel and Residences Emirates Pearl and Bab Al Qasr. The 200-room Four Seasons on Al Maryah Island opened in May, and the 156-room Gloria Downtown Hotel opened in April.
The delayed 677-room Bab Al Qasr is expected to open this current quarter.
Bab Al Qasr will be the first property to open as part of Millennium and Copthorne Middle East and Africa’s luxury Biltmore Collection.
Increased competition means more Abu Dhabi hotels are offering packages and room promotions, consultant CBRE said in its second-quarter report for the Abu Dhabi market.
That includes room packages from Dusit Thani Abu Dhabi until the end of September, Yas Waterworld packages from Rotana and room rates at half the price from some luxury hotels, compared to Dubai properties during the summer season. A room at Four Seasons hotel in Abu Dhabi starts at Dh790 for a Friday night later this month, compared to Dh1,760 for a night at its Jumeirah property in Dubai the same day.
In May, the latest data available, Abu Dhabi average occupancy rose 1.3 per cent to 74.4 per cent year-on-year, while the average daily rate decreased 4.1 per cent to Dh433.10, according to STR.
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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BEETLEJUICE BEETLEJUICE
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Director: Tim Burton
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
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Hotel Silence
Auður Ava Ólafsdóttir
Pushkin Press
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THE SPECS – Honda CR-V Touring AWD
Engine: 2.4-litre 4-cylinder
Power: 184hp at 6,400rpm
Torque: 244Nm at 3,900rpm
Transmission: Continuously Variable Transmission (CVT)
0-100kmh in 9.4 seconds
Top speed: 202kmh
Fuel consumption: 6.8L/100km
Price: From Dh122,900
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MATCH INFO
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned