Marriott International, which took over the management of the Harbour Hotel and Residence in Dubai Marina from Emirates Airline yesterday, plans to expand its presence in the emirate, a senior executive said. Despite falling revenue at Dubai hotels because of lower demand and a glut of rooms, Marriott remains confident of success, with agreements to operate another nine hotels there, said Jeff Strachan, the area director of sales and marketing for Marriott, Middle East and Africa.
"Although Dubai has come down a huge amount from where it was in 2008, in terms of occupancy and RevPAR, Dubai has still performed extremely well as a benchmark against other major cities," he said. RevPAR, or revenue per available room, is an important industry indicator. "The market has now readjusted itself and is going to be extremely competitive for everybody moving forward, forever. We're back to a normal market, so it's just like operating hotels in any normal city in the world."
The company operates six hotels in the emirate. Mr Strachan said Marriott had seen a drop in revenue per available room across its Dubai hotels this year, but its hotels were still outperforming the market. Hotel prices worldwide fell 17 per cent to their lowest level in five years in the first half of the this year, according to the Hotels.com hotel price index released yesterday. In Dubai, prices paid in dollars in the first half of the year were down 26 per cent compared with the same period last year. In sterling, prices fell 4 per cent.
"In the second quarter, the sharp price drops in Dubai began to soften slightly as hoteliers adjusted to the rapidly changing economic situation," the report stated. Fewer Britons and Russians are travelling to Dubai, while more visitors from the US and Italy are, the report said. Mr Strachan said along with other hotels in the city, Marriott's hotels had had to reduce rates to compete for guests and to appeal to a wider base of customers.
Marriott has signed agreements with developers to operate two hotels at Lifestyle City, one in the Marina, one on Sheikh Zayed Road, another two at Healthcare City, one at Jebel Ali and two at Motor City, across its portfolio of brands including Courtyard and Renaissance. Most of the hotels are expected to open between next year and 2012, but construction on those in Jebel Ali and Heathcare City has yet to begin as the broader developments remain on hold. Marriott also has three hotels under construction in Abu Dhabi.
Prices in Abu Dhabi rose 15 per cent year-on-year in sterling on average in the first half of the year, making it the world's most expensive major destination, according to the Hotels.com report. This was due to the lack of hotel rooms and its importance as a business destination. In dollars, prices were actually off 9 per cent, the report stated. The Emirates-owned hotel in Dubai Marina will be its first Marriott branded hotel in Dubai, and will become the Dubai Marriott Harbour Hotel and Suites.
Mr Strachan said this would open up access to new customers through Marriott's global network and its Marriott Rewards loyalty programme. "Emirates just didn't have access to those channels before," he said. rbundhun@thenational.ae