Close to 100 hotels to open in UAE amid glut over next five years

The expected hotel openings in the UAE include Ramee Grand Hotel and Spa in Dubai’s Business Bay, which will open its doors in 2019.

Analytics company STR said that at the end of January the UAE had about 29,000 hotel rooms in the pipeline. Silvia Razgova / The National

Nearly 100 hotels are expected to come onstream in the UAE over the next five years even as supply exceeds demand.

Figures from the analytics company STR show that at the end of January the UAE had about 29,000 hotel rooms in the pipeline – the second-highest in the region after Saudi Arabia, which has 37,000 rooms across 85 hotels over the same time period.

The new hotel openings in the UAE include Ramee Grand Hotel and Spa in Dubai’s Business Bay. The Dh350 million, 200-room project is expected to open in 2019 and will be owned by the Dubai-based Ramee Group.

Saudi and the UAE were followed by 8,462 rooms in 34 projects in Qatar and 5,734 rooms in 14 projects in Egypt.

In Middle East overall, there were a total of 159,581 rooms across 556 hotel projects in the pipeline. In Africa, there were 58,850 rooms across 313 projects.

In the UAE, hotels in both Dubai and Abu Dhabi have felt pressure on room rates as more properties come onstream.

In Abu Dhabi alone, the average hotel room rate dropped 10 per cent year-on-year in January to Dh465.80 as supply outstripped demand, according to STR.

Conferences in the city, such as the two-day Global Space Congress, helped to cushion the drop in the average occupancy rates. The average occupancy rate in the capital was 74.2 per cent, a drop of 1.4 per cent compared to the same period last year.

In Saudi Arabia, Mecca is the largest market for hotels, given the large number of pilgrims it attracts.

The number of visitors is expected to rise in the medium term as the ministry of Haj and Umrah removed the quota on the number of foreign pilgrims this year, according to consultancy Colliers International.

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