On his recent visit to Dubai, Marriott International CEO Arne Sorenson emphasised the importance of Marriott’s growing select-services hotel portfolio.
The UAE is currently home to 16 of Marriott International’s brands – with over 50% of its existing portfolio across its upper-upscale brands, including Marriott Hotels, Sheraton and Le Meridien. The US-headquartered company also has 15 properties across five luxury brands in the country.
While the company’s development pipeline highlights solid growth for its upper-upscale and luxury portfolio, its select-service brands represent over 70% of the development pipeline for the UAE. The growth of its select-service portfolio, which features brands such as Courtyard by Marriott, Aloft Hotels, Element Hotels and Residence Inn by Marriott, is in line with the UAE government’s efforts to expand the mid-scale segment in the country.
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“Ten years ago the supply in this market was about 80% luxury and the rates up until four-five years ago, Dubai was heading the global rankings in terms of rates. But if you step back and look at the vision of Dubai which is 20 million tourists by 2020 you can conclude that it’s not sustainable to focus completely on luxury hotels,” he added.
“Dubai has actually said that we need more mid-market hotels in order to diversify our offerings for tourists and today the ratio of luxury hotels to mid-market hotels is about 60:40.”
“Our ability to offer a lower price point is very good for Dubai’s tourism landscape as a whole,” the American CEO said. “This is not just a phenomenon we are seeing in the Middle East. This is a global shift that we are seeing in almost all the countries we operate in. The first wave of global hotel brand development is in the high-end, luxury market. As markets get more and more developed, you start to see more and more tourists show up and you see a broader set of traveller.”
He believes that it’s those factors are driving the growth of the mid-market hotel industry in the Middle East.