The Abu Dhabi F1 race held at the Yas Marina circuit is one of the highlights of the city's events calendar. The Abu Dhabi F1 race held at the Yas Marina circuit is one of the highlights of the city's events calendar.

Looking up for Luxury?
In addition to the increasing number of visitors to the UAE capital, another part of the Abu Dhabi hospitality market that seems to be rapidly going up is the number of luxury and five star hotels in operation.

The last few months alone have seen the opening of the 189-key, 34-storey Rosewood Abu Dhabi in the city’s Central Business District (CBD) and the 533-key Dusit Thani Abu Dhabi located near the Abu Dhabi National Exhibition Centre; both of which will soon to be joined by the 283-room St Regis Abu Dhabi on the corniche, the city’s second St Regis after its sister property located on Saadiyat Island.

This wave of development is, according to Hewett, beginning to show that “unfortunately, it is looking as if Abu Dhabi may soon reach the point of saturation when it comes to luxury properties.”

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However, TCA’s Al Dhaheri believes this recent wave of luxury hotel openings in the city is an indication that “international operators and investors believe Abu Dhabi represents a solid proposition for luxury and economy properties.”

“Buoyed by greater ever-growing hotel guest arrivals, we believe the luxury segment is holding up very well. There are obviously challenges from increased competition and Abu Dhabi’s luxury operators must continue to package affordably and utilise international client databases to increase their footing in the local marketplace,” says Al Dhaheri.

Listening to the mixture of disappointment and optimism from market analysts, it can be easy to feel confused about the outlook for the Abu Dhabi market over the next 12 months. However, hotel operators on the ground appear to be much more practical when it comes to the market’s continued growth.

Dilip Mukundan, director of sales and marketing at the recently opened, AED 1.5 billion Ritz-Carlton Abu Dhabi Grand Canal, one of the largest luxury hotels on the market with 532 rooms, reveals a careful plan for the hotel to play to its strengths.

‘From a business standpoint, with the inventory that we have, then the MICE market is a huge focus for us. Looking at the Abu Dhabi market in general, we believe the corporate travel segment will be one segment where we foresee continued growth,” comments Mukundan.

“Of course when you build any new hotels you initially feel the pinch, but we are intending to follow the long term growth and vision of Abu Dhabi. This is not a simple quick affair but a marriage and we are here for the long term and committed to seeing this market grow,” he adds.

This is a message echoed by another international operator in the city, with Hilton Worldwide’s vice president for the Arabian Peninsula Christian Grage insisting that Abu Dhabi is “a healthy mix between leisure and corporate business, and both are very important for us, especially as they tie into our seasonal market.”

“Abu Dhabi is clearly progressing and we feel that this is the right time to be in the market. I wouldn’t even term it as competition, as every luxury hotel that comes onto the market is actually selling the destination and developing Abu Dhabi.

Looking at the financial data that we are seeing on the Abu Dhabi market, for the first quarter we are seeing a 15% revenue growth over last year, with a 6% growth in visitor numbers to the city. So that tells a story that I believe everyone is finding their share of the market,” adds Grage.

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