|By Muzaffar Rizvi, Khaleej Times, Dubai,
United Arab EmiratesMcClatchy-Tribune Regional News
April 29, 2012--Marriott International will launch 42 new properties in the Middle East and Africa, or MEA, in the next five years to expand its portfolio in the region, its top official said.
The world's leading lodging company, which has seven brands in MEA, is expected to add 11,000 rooms by 2016 to double its existing room capacity and become one of the biggest hotel operators in the region.
"The region remains a key market for tourism development because of its wealth, high disposable income, demographic growth and proven resilience to crisis," Alex Kyriakides, president and managing director of Marriott International Middle East and Africa, told â€¨ during an interview on the sidelines of the Arabian Hotel Investment Conference, or Ahic.
The US-based hotel operator, which has more than 3,700 properties in 73 countries and territories, will continue to invest in the region to boost its market share. It has a 10,709-existing room capacity at its 38 properties in 11 countries across seven lodging brands in MEA.
Kyriakides was upbeat about the outlook of the hospitality industry in the UAE and said Marriott will target luxury business travellers, as well as the meetings, incentives, conferences and exhibitions, or Mice, market in Dubai. He was confident about the fourth-quarter opening of JW Marriott Marquis Dubai, which is expected to be the world's tallest hotel at 1,164 feet, or 355 metres.
"Looking specifically at the UAE, we have nine hotels scheduled to open by 2014, including the 1,608-room JW Marriott Marquis Dubai that will open its doors to guests in fourth quarter of 2012," he said.
"The Marquis endorsement is reserved for iconic properties in the Marriott International portfolio, defined by their scale, grandeur and location. We are particularly excited about this property as the new JW Marriott Marquis Dubai will be the first branded property outside of North America and will target luxury business travellers as well as the lucrative and increasingly important Mice market."
In reply to a question, he said Marriott has no immediate plans to introduce a new brand in the region. "We have just introduced our seventh brand to the region -- the quality-tier Residence Inn by Marriott -- with the opening of the 78-unit Residence Inn by Marriott, Juffair in Bahrain in December 2011. For now, we will concentrate on growing this brand and have a further two hotels scheduled to open by 2014."
Kyriakides sees a positive outlook for the hotel industry and said he is expecting an "exciting 2012".
"We are confident that 2012 will be a successful year for both Marriott and the global lodging industry. With a growing middle class and rapid economic growth in many emerging markets, global demand is increasing steadily. As a result, we expect revenue per available room to continue to improve in most markets."
"The tourism and travel figures indicate a very positive outlook for the UAE hotel industry in 2012 and we intend to capitalise on this. With a number of new hotel openings in the pipeline and renovations of existing hotels that continue to energise our brands, we expect 2012 to be an exciting year," he added.
In reply to a question about occupancy levels, he said the UAE is already seeing strong occupancy levels with recent STR Global figures, for example, revealing that Dubai had the highest global occupancy rate at 86.2 per cent in January 2012, pushing Hong Kong (79.7 per cent) and Sydney (78.2 per cent) into second and third place. He said the UAE is also benefiting from a rise in visitors from the Gulf and a surge of new arrivals from the Far East, with a recent Jones Lang LaSalle data showing that 214,000 Chinese tourists came to Dubai in 2011, up from 25,000 a decade earlier.
"These figures suggest that 2012 will be an excellent year for occupancy levels in the UAE," he said.
"The UAE hotel industry is already in great shape. UAE hotels experienced occupancy rates of about 79.8 per cent in February 2012 -- a very strong performance, especially when you consider that a high volume of new hotel capacity has come onto the emirate's market recently."
To a question about the impact of so-called Arab Spring on the UAE's hotel industry, he said: "The Arab Spring was without a doubt a very challenging period for the industry. However, the UAE benefitted as it was deemed a safe Middle East alternative to Arab Spring-affected countries such as Bahrain and Egypt."
"The Emirates reported the biggest hike in both leisure and business trips [up six per cent and 14 per cent, respectively in 2011] and STR Global also reported an eight per cent increase in occupancy and seven per cent growth in revenues per available rooms in 2011."
To a question about the impact of infrastructure spending in the region's hospitality sector on demand and supply, he said: "Yes, I think it will have a positive impact as it will help equip the Middle East region to meet growing demand."
About the increased competition and possibility of peak rates in near future, he said room rates are expected to rise as demand picks up.
"The hotel business is by nature one of supply and demand. If the demand is high, average room rates will naturally rise. If we look at Dubai as an example, due to the political instability in the Mena region, many tour operators, business travellers and investors have shifted their business and started to focus on Dubai and the UAE as a safe and stable destination. As a direct result, the majority of hotels are running at occupancy levels comparable to 2008, albeit at lower average daily rates. Experts are predicting that room rates will witness a five to 10 per cent increase over current levels as demand starts to soar," he said.
In reply to a question about first-quarter performance, he said the first three months of 2012 have been great for Marriott International. The group reported revenues of over $12 billion in fiscal year 2011.
"Occupancies and room rates improved at our hotels in most markets around the world, including the Middle East. Transient business was also strong. Globally revenue from special corporate guests increased over nine per cent in the quarter with increasing room rates. At the same time, our worldwide development pipeline increased to 115,000 rooms in the first quarter as we continue to increase our global market share."
(c)2012 the Khaleej Times (Dubai, United Arab Emirates)
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