Dubai’s ambitious growth strategy for its hospitality sector is proving to be a big draw among international players, including Australia.
Dubai Investment Development Agency (Dubai FDI) in the Department of Economic Development (DED) in collaboration with The Links Group, is making a strong pitch to bring more global operators into the emirate.
With Dubai expecting to attract 20 million tourists by the end of the decade, according to the emirate’s Tourism Vision for 2020, investment in hospitality infrastructure and services is a top priority for the government.
Dubai’s hotels welcomed more than 11 million guests in 2013 – an increase of just over one million on 2012 figures and an indication that Dubai is on track to achieve its 2020 visitor target.
Fahad Al Gergawi, Chief Executive of Dubai FDI, said the hospitality sector in Dubai is set to experience a massive boom, with more than 24,000 hotels and serviced apartments expected to enter the market in the next three years.
“Coupled by our successful bid to host Expo 2020, Dubai is becoming an increasingly attractive investment destination for foreign hospitality companies, he said. “It is important we continue to evaluate and evolve commercial activity in the sector in order to attract the most innovative companies to the emirate.”
Hotel management companies slow to enter market
While the tourism sector is well recognised as a significant driver of Dubai’s GDP, some of the larger international hotel management companies have been slower to enter the market.
However, Dubai’s willingness to review and evolve commercial activities permitted in the hospitality sector has given a strong reason for such companies to move to the emirate.
John Martin St Valery, founding partner, The Links Group, a company formation specialist in the UAE and Qatar, said previously, international hotel operators had to partner with local property owners to operate in the emirate.
“This restricted potential expansion opportunities and meant a gap existed in satisfying internal risk criteria for a lot of these companies, Mr St Valery said.
“Now, with the help of Dubai FDI, we have specific commercial activity for hotel management services introduced in Dubai and this has attracted owner-operator brands like Four Seasons Hotels & Resorts to Dubai as well as seen the restructuring of brands like Radisson Blu.
“It has also allowed property developer The First Group expand into serviced hotel apartments and hotels.”
Highly demanded activity
Rob Burns, Chief Operating Officer for The First Group said: “With the help of Dubai FDI, Department of Tourism and Commerce Marketing (DTCM) and The Links Group we were able to get hotel management operations recognised as a highly demanded and relevant activity that should be supported in line with the vision of Dubai Government to grow the tourism and hospitality sector.
“This means The First Group can now independently own and manage our line of serviced hotel apartments and hotels, which brings significant revenue potential to our Dubai based business while supporting the market’s need for additional hotel keys,” Mr Burns said.
Sophisticated, cosmopolitan social scene
PACHA, one of the world’s most recognised entertainment brands is also set to open the largest combination dining and night club experience in Dubai later this year.
Umesh Amarnani, founder & CEO of Utopia, the master franchisor for PACHA in the Middle East said: “Dubai has long been in our business development sights. It has a sophisticated, cosmopolitan social scene that is globally recognised and a vibrant tourism sector that continues to grow.
“PACHA makes perfect sense for this market from both a resident and tourist perspective. We’re glad the authorities recognised this potential, sat with us to understand our business and have created the appropriate commercial activity to cover our specific needs.”
Earlier this year Dubai welcomed the launch of another hospitality concept under the revised list of commercial activities.
Ghaf Kitchen is a high-end catering concept and dining experience with a difference, bringing the first gourmet restaurant on wheels to the UAE. As preferred partner of Dubai FDI, The Links Group played an instrumental role in enabling these companies start their operations in Dubai.
David Obrien, co-founder of Ghaf Kitchen, said: “Ghaf Kitchen was the collective brainchild of three highly experienced professionals with a passion for food and entertainment. Having worked around the world, we could immediately recognise the potential of Dubai – not only is food an essential element in its social scene, the community here is always on the lookout for new and novel.
“While we can’t pretend that there weren’t challenges in the beginning in terms of getting our business up and running, when you’re a pioneer in any market tenacity becomes part of your success. We are delighted to be operational and even more delighted with the response we have received to date.”
The Links Group can assist Australian companies and investors to establish a commercial presence in the Middle East. To learn more click here.