Premier Inn plans more hotels in Dubai

A Premier Inn located across the highway from Terminal 3 of Dubai International Airport. Lee Hoagland / The National

Premier Inn, the UK’s biggest mid-range hotel brand plans to open seven new hotels in the Arabian Gulf by 2017.

It is part of a push to add as many as 10,000 rooms across the Middle East and Asia over the next four years.

It is targeting the opening of 10,000 rooms by 2018 with more hotels in Dubai and new offerings in Sharjah, Saudi Arabia, Qatar and Oman. In India there will be 1,000 new rooms in seven hotels and in South East Asia nearly 2,000 rooms in 12 hotels. Premier Inn plans to open 50 hotels in cities throughout the Middle East and Asiaby 2018.

“If Dubai’s growth froze today it could take another 20 to 30 Premier Inns,” said David Vely, regional senior vice president for development at Premier Inn International.

Currently, it operates five hotels in Dubai with another three under construction. As many as five additional properties are under discussion.

He said that the mid -market hotel segment operates very differently from upmarket properties. Operating a large number of properties in areas of high demand is important so that if one hotel is full, the operator can offer another nearby.

“Network density is important so if one hotel is full we can offer another locally,” Mr Vely said. “Dubai has the highest revenue per available room [Revpar] in the GCC and I cannot see that ending with its growing infrastructure and diversification,” he said.

While the UAE may be famous for its luxury hotel offerings, it is the mid-range that is the fastest growing sector. The Dubai Tourism & Commerce Marketing (DTCM) in September last year called for an increase in the number of budget hotels and offered a municipal tax reprieve in an effort to meet demand for such properties. Eligible hotels are exempted from the 10 per cent municipality fee levied on the daily room rate.

“There is a huge shortage of mid- range offerings in the UAE and wider Gulf region,” said Craig Plumb, head of research at the property consultants JLL. “That is why the DTCM called for an increase in the sector. Dubai is an expensive city with five-star hotels dominating the sector, they have a market share exceeding 60 per cent and about a 50 per cent of pipeline supply.

“People will not stop over in a city which they cannot afford a hotel room. There are two and three-star offerings here but they are not branded so I think we will see some being subsumed into bigger branded chains.”

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