Investors consider converting luxury projects into budget hotels
April 5- Several investors in the UAE who are involved in luxury hotel projects are planning to convert them into budget hotels, it was learnt on Sunday. In fact, many analysts expect that the mid-segment hotel market will grow in the coming months since it is a virtually untapped market. "Only about 20 per cent of the total hotels in the region are budget, so there is a huge growth opportunity," said Arnaud Andrieu, Vice-President, CB Richard Ellis Hotels, Middle East. The new motto is “comfort at an affordable price”.
"Earlier most of the investors were keen on developing luxury hotels. The trend is changing and many investors who have invested in land or want to enter the hospitality sector are now exploring the budget segment," said Andrieu. The sector may also see some tie-ups between global mid-segment brands in the region by the end of this year.
International brands such as Premier Inn, ibis and Citymax are already in Dubai and are bullish on the budget segment in the region. This, according to analysts, shows a mature tourism market in the Gulf region. Also, budget hotels have reported better occupancy levels as compared to their luxury counterparts.
Meanwhile, he global hotel index by STR Global, the international hospitality research firm, indicates that the Middle East and North Africa (MENA) region tops both in occupancy and average daily rate (ADR) in the first quarter of 2010.
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