Dubai hotelier Michael Scully, managing director of First and Foremost Hotels and Resorts, has identified a lucrative opportunity in the Middle East’s burgeoning hotel market...
"The UAE certainly likes its large trophy assets, which have traditionally performed extremely well. At one stage owners were getting up to 30% ROI on their large investment portfolios. However, such high returns are — in most cases — highly unlikely to be repeated in today’s market and the foreseeable future.
"Today, borrowing costs are relatively high and there is a lot more stock in the market compared to a number of years ago.
"We know that Dubai continues to go from strength to strength in the tourism sector and I believe this will certainly continue in the foreseeable future. However, we do know that the low periods — such as during summer — continue to become more difficult due to the additional room supply in the market.
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"Over the years I have identified the areas where I believe the tourism industry in this region has growth potential largely ignored due to the success of its traditional leisure and business markets."
Keep it in the family
"In order to facilitate growth in the UAE and the wider Middle East, it is time we stopped ignoring many lucrative opportunities in associated leisure markets, including the elderly, singles, cultural, adventure, sports, and water sports in particular, and — my favourite — the family leisure market.
"In the family leisure market we should be catering to those families with young children under the age of five — this market is huge; it has the advantage of not being governed by school holidays and is currently underdeveloped.
"Furthermore, not only can this market incorporate many of the other segments mentioned above, but it is geared more towards the three- to four-star markets as far as facilities and product are concerned, which requires substantially less capital than traditional high-end developments.
"We know from the success of the many family hotels in the Mediterranean, Far East and Americas that there is a huge demand for this form of leisure which concentrates far more on the activities as opposed to structural facilities."
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