Budget hotels have ‘seven-star’ potential

Budget hotels have ‘seven-star’ potential

In the pre-recession days of ‘bling’ developments like Dubai’s Burj Al Arab, Mideast hotel owners weren’t interested in developing mid-market properties. But they are now.

May 7, 2010 9:33 by Emily Meredith

Indeed, part of the conundrum for the region’s hoteliers is how to cope with a new influx of consumers who hold extremely different views of lodging and vacation value. Dubai, for example, has based the bulk of its success over the past decade on marketing itself as one of the world’s most luxurious leisure and lodging destinations.

It’s a strategy that’s largely paid off. In 2007, hotels in the emirate boasted an average room rate of $308. The next highest location was New York City, with a rate of $275. Dubai’s hospitality sector has always argued in unison – until now, that is – that the super-rich consumer’s lodging habits are less affected by the ebbs and flows of the economy than those of the average traveler and that the luxury hotel market, therefore, is far less volatile.

A new study points to the fact that the latest wrinkles in the world economy have taken their largest toll on the high-end of the lodging market, however. Declining occupancy levels put Dubai’s strategy of being solely reliant on super-luxury into question. Hoteliers like Ritter are now in the pole position.

- Trends magazine.

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Tags: Burj Al Arab, CB Richard Ellis, Dubai, emirates, mid-market hotel sector, Park Inn, Premier Inn, Radisson Blu, Rezidor