Hotels cash in on Dubai boom

by Penny Wilson

WITH its oil supply likely to dry up in 30-40 years' time, Dubai is increasingly turning to tourism to bolster its economy.

The next move on the agenda of the Dubai Commerce and Tourism Promotion Board, set up four years ago by the government, is the introduction of a star rating system for Dubai's 157 hotels, similar to that in the UK and France.

During 1991-92, the board's marketing strategies, allied to a government pledge to plough 25% of Dubai's total investment into leisure-related activities, led to a 32% increase in the number of hotel guests.

Business guests form the largest proportion, thanks to the continuing upturn in Dubai's corporate activity, albeit with an interruption during the Gulf crisis.

Dubai's non-oil trade increased by 24% to £16.3b in the same period, and the number of companies operating in the Jebel Ali Free Zone (offering 100% foreign ownership, exemption from import duties and corporate taxation and 100% repatriation of capital and profits) rose from 245 at the end of the Gulf War to 525 by the middle of last year.

During 1992 alone, 123 new business operations from 27 countries were set up, leading to ever-increasing visitor traffic and a growing need for hotel accommodation. Demand now consistently exceeds room supply.

The most obvious gap is in the four-star market, which is ripe for development, as is Dubai's share of the United Arab Emirates' 700km of coastline. Forte has already leaped into the coastal frame with its new Forte Grand Jumeira Beach Hotel, due to open in March. This will prove significant in expanding Dubai's beachfront room capacity by more than 25% from just 946 to 1,189 rooms.

Also, the Dubai-based Abjar Hotels International, which opened the de luxe Royal Abjar hotel just over a year ago, has announced plans to open a multi-million pound luxury beach club.

The list of hotel owners and operators drawn by Dubai's efforts to attract wealthy, high-spending tourists and, not least, the taxation policy and a plentiful and inexpensive labour force from the Far East is extensive.

lAccor is planning a 120-bedroom Novotel in April, plus a de luxe 200-bedroom Sofitel property for 1995.

lGolden Tulip has just opened the 100-bedroom Maredias Hotel.

lMarriott has opened a 235-bedroom hotel under its top JW Marriott brand.

lThe Dubai-based Al-Hab-toor Group is building a Met Club in the Jebel Ali zone.

lAmong the hotels to have just completed expensive refurbishments are the four-star Dubai Plaza Hotel and the Sheraton and Hilton hotels.

lA 405-bedroom Holiday Inn Crowne Plaza is scheduled to open in March as part of an apartment, shopping and office development. Holiday Inn is planning to shift its regional headquarters from Saudi Arabia to Dubai.

With the right developments now on stream, the Commerce and Tourism Board has now turned its attention to two primary tourism markets: north-west Europe, and Saudi Arabia, Kuwait and Bahrain.

It is targeting only high-spend tourists wanting to take advantage of sand, sea, desert drives, cheap but high-quality gold and what is claimed to be the best duty free shopping in the world.

In addition, "pioneering markets" have been identified in the Far East, Japan and North America. Japan is being bombarded with news of three newly opened, championship golf courses.