• Jumeirah adds flag as Mid East recovers

Jumeirah has launched a new upscale brand, Zabeel House by Jumeirah, with five management contracts already signed under what the group describes as “an eclectic collection”.

The news came as hotels in the Middle East saw a recovery in performance in December, after a being driven lower in the wake of falling oil prices and increased supply.

At Jumeirah, the company described its new brand as “high on design but low on complexity…with an aspect of bespoke design, unique features and architectural details to fit the individual location”. The first hotel under the new flag will be the Zabeel House by Jumeirah – The Greens, due to open in Dubai in the fourth quarter of this year, with 210 rooms, two restaurants, terrace dining around the pool area, conference and business facilities, as well as a gym and spa treatment rooms.

The announcement came shortly after Jumeirah announced the appointment of Joel Silva as its new CEO, replacing Stefan Leser, who left the group after four months for personal reasons. Silva joined from Four Seasosns Hotels & Resorts, where he was regional VP overseeing France, Switzerland, Spain and Portugal, as well as as well as GM of the Hotel George V in Paris.

His Excellency Abdulla Al Habbai, Chairman of Dubai Holding commented: “We are determined to continue developing Jumeirah into a globally recognised national champion; setting new industry benchmarks for world class service and quality.  Mr Silva has had a distinguished career in hospitality with some of the world’s leading brands.  I am confident his passion for designing unique guest experiences and driving innovation in the sector will build on Jumeirah’s strong growth, as we continue to enter new markets and open new hotels both at home and abroad.”

Jumeirah’s plans for growth came as its domestic market was showing signs of recovery after a difficult period in the wake of volatile oil prices. Hotstats singled out Abi Dhabi, which bucked its own 2017 trend of falling revenue and profit levels, to record a 15.9% increase in GOPPAR in December last year.

The growth in revenue was led by a 9.0% increase in revpoart, to USD117.33, as hotels in Abu Dhabi successfully recorded an increase in both room occupancy (+3.6 percentage points) and achieved average room rate (+4.0%).

Pablo Alonso, CEO, HotStats, said: “The diversity of hotel markets across the Middle East & Africa and their key demand drivers means it always going to be a mixed bag of top and bottom line performance, but this year has been particularly volatile due to the ongoing oil crisis, political and economic instability and security concerns.

“It is therefore pleasing to report such a positive month of trading for hotels in the region at the end of 2017 and we look forward to profit performance recovering further in 2018.”

The Middle East region as a whole recorded a 5.6% drop in revpar for 2017, to USD106.89, with STR analysts noting that supply growth continued to affect hotel performance in the country, especially with Dubai’s build-up to the 2020 World Expo and beyond.

The group said: “Not only will the amount of new hotel supply continue to influence Dubai’s ADR, the type of new hotel supply entering the market will create a shift in the pricing landscape, with more offerings in the Midscale segment. The market has been historically dominated by the upper-tier hotel classes. Additional offerings in the middle-pricing tiers, however, has helped the market’s demand continue to rise, as a wider price range has made Dubai more accessible at various travel budgets.”

Dubai continues to add new tourism attractions to stimulate demand growth, helping the market drive hotel demand as inventory expands. Abu Dhabi is following a similar trend, but at a smaller scale due to a smaller market size. Along with hotel supply developments, the market is adding several new cultural attractions, including the Louvre Abu Dhabi, which opened in November 2017, and additional museums slated to open in the coming years.

STR added: “An expected increase in oil prices, combined with sustained growth in the non-oil sector, should drive economic expansion in Abu Dhabi in 2018, allowing the economy to rebound from relatively flat performance during the previous 12 months. That should be an encouraging signal that the hospitality industry will turn the corner.”

HA Perspective [by Katherine Doggrell]: It will come as no great shock to the economists amongst you to learn that, when your economy relies on just the one type of income, any shift in the pricing is going to buck that economy like so many wild horses. So diversity is required, as Dubai well knows, with its efforts to shift away from leaning on oil towards tourism, flooding the market as it does.

So there’s a period of realignment required and, helpfully, the oil price has perked back up in time. The main beneficiaries have been the Russians, with the number of Russian tourists travelling to the GCC in 2020 expected to be 38% higher than the arrival figures recorded for 2016, according to data published recently by Arabian Travel Market.

Russia’s links with the GCC strengthened in 2017 with the introduction of additional airline routes, visas on arrival in the UAE for Russians, a new generation of leisure attractions, retail destinations and a broad range of hotels and resorts right across the GCC region.

The additional good news for the Russians last week was that the Trump administration continued to refuse to impose the sanctions backed by both the Democrats and Republicans, saying that just the threat of sanctions was enough to give Russia pause. Donald Trump’s decision to impose tariffs on solar technologies is also likely to add some cheer. The only fly in the ointment are his attempts to boost coal production in the US. But until aircraft are steam powered, cheap travel for Russians should bolster the region as it tries to cut its reliance on oil.

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