Demand for three-star accommodation in Dubai surged 70 percent in the first quarter of this year, according to a report by Arabian Business.
Expedia, the US-based online travel reservation website, said that while interest in the budget hotel market was increasing, the three-star hotel segment only represented a third of the new hotels in the Middle East that were added to the site last year.
However, data from Expedia found that in the first quarter of this year interest in three-star properties in Dubai grew by up to 70 percent over the same period the year before. While interest is high, the latest STR Global Construction Pipeline Report shows that the hotels being planned in the region do not reflect this and luxury is still the dominant force in the market.
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STR Global’s March report found that of the 473 hotels and 127,952 rooms in development in the Middle East, the economy sector only accounts for 4,573 room or 3.5 percent of the market.
This is a global phenomenon and the World Tourism Organisation claims that the economic climate drove demand for economy hotels by as much as sixteen per cent last year.
Kurt Ritter, the CEO of the Rezidor hotel group, whose brands include Radisson, Regent, Country Inn and the midscale Park Inn, said there “absolutely” is a sharp rise in the growth of midscale hotels in the Middle East and this is because the downturn has led to a shift in the mindset among property owners.
“There is a big opportunity. Some people talk about it but it is there. Historically everybody wanted five star and owners’ attitude [was] ‘what would my family tell me if I were to make a mid market hotel, they would look down on me’ but I said ‘do you want money or do you want prestige at the end of the day’ and of course everybody wants money, it goes without saying,” he added.
The potential of the midscale market is something that was identified by HE Sheikh Mubarak Abdullah Al Mubarak Al Sabah, chairman of Action Hotels.
“[Midscale] has been a buzz word for a few years. We are ahead of the race. The ibis, Holiday Inn and Novotel flags sit perfectly in this lodging gap for business travellers and tourists who ‘travel differently’ and want a comfortable room and personable proactive service at true value rates,” said Sheikh Mubarak, whose company, in partnership with the global hotel operators Accor and InterContinental Hotels Group, plans to open 2,600 midscale hotel rooms in eight cities across the Middle East by 2012.
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