Mandarin Oriental gets a foothold in Dubai with hotel near Burj Al Arab

One of the last remaining luxury brands to have resisted Dubai's charm will manage 200-room property.

The Mandarin Oriental is to open a hotel in Dubai. Philippe Lopez / AFP

Hong Kong’s Mandarin Oriental has finally established a foothold in Dubai’s lucrative hospitality market.

One of the last remaining luxury hotel brands to have resisted Dubai’s charm, the hotelier will manage a 200-room property on Jumeirah Beach Road near the Burj Al Arab from 2017.

“It took us a while to find the right partner, location and investors,” said Christoph Mares, the executive vice president for operations in charge of Europe, Middle East, Africa and India. “In Dubai, you’re never too late as there is always demand, especially now with Expo 2020, and Dubai is now one of the gateway destinations of the world.”

The Hong Kong-listed company, meanwhile, is still in talks with the Tourism Development and Investment Company in Abu Dhabi to develop a hotel on Saadiyat Island announced in 2010. “It is still very much on the cards,” Mr Mares said. “We should have something there much before 2020.”

Tourists to Dubai have been increasing for the past few years, and 5.8 million visitors checked into its hotels and hotel apartments in the first half of this year, up by 2.3 per cent from a year earlier.

Dubai is also among the top profitable markets in the world, after Hong Kong and Paris, according to STR Global. But it is also getting crowded in the luxury segment. Of Dubai’s nearly 70,000 hotel rooms, more than half are in this category, according to STR Global.

Room rates at the Mandarin Oriental in Paris start at about €1,000 (Dh4,733) a night, but Mr Mares said rates in Dubai would depend on demand and supply.

The average daily room rate in Dubai this year is expected to touch Dh920.97, up 5.7 per cent from last year, according to STR Global. The occupancy rate, however, is expected to fall 3.3 per cent to 77.4 per cent for the whole year.

Construction on the Mandarin Oriental project started six months ago, with Wasl Hospitality as the developer. Dubai Real Estate Corporation owns the property.

Mandarin Oriental has a portfolio of 45 properties, with 18 in the pipeline. It will open its first property in the Mena region in Marrakech, Morocco, next year, followed by a property in Doha in 2016. It made a gross profit of US$102 million in the first half, compared with $107m in the same period last year.

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