Mid-market travel takes region by storm

Gemma Greenwood

The major Gulf destinations are synonymous with luxury hotels. In fact that’s how Dubai initially got a name for itself, with iconic Jumeirah Group hotels such as the Burj Al Arab and Jumeirah Beach Hotel putting the city on the global tourism map.

The Burj introduced the ‘seven-star hotel’ concept to the world and both architectural wonders conceived by Jumeirah paved the way for other luxury hotel brands to showcase their opulence and service excellence in a larger-than-life destination where anything was possible.

But Dubai has since evolved and there’s much more to this city than meets the eye. Sure, its tourism and hospitality standards remain world class and continue to attract high-spending tourists, but the city has matured. Looking past the sun, sea, sand and shopping, there’s a thriving sub culture, which is youth orientated, plus a growing family offering that will soon include some of the world’s best theme parks.
Dubai is also one of the region’s top business and trading hubs, while the upcoming World Expo has kick-started new investment and development activity to proportions that as yet, remain to be seen.
The upshot is that new breeds of corporate and leisure travellers are heading to the city and many are opting for affordable flights and accommodation.

Dubai’s home-grown low-cost carrier flydubai is connecting the city to many new source markets and in 2014 alone, added 23 new routes, expanding its network to 86 destinations by the end of the year.
Hotel investors and operators have finally identified the opportunity to capitalise on the growth potential of the ‘value travel’ market, which has given rise to pent-up demand for affordable accommodation.
Encouraged by government-led incentives incentivising investors to build midscale hotels and hotel apartments, plans are now afoot to correct under-supply issues and rapidly expand the city’s property offering in the three- and four-star categories.

Dubai currently has 93,030 hotel keys (January 2015), and that figure is forecast to rise to between 140,000 and 160,000 keys by 2020. Around 20,000 to 35,000 of these are earmarked for the mid-market hotel sector, with most of the global hotel brands as well as local UAE-based operators planning to get their slice of the pie.
Hilton Worldwide, InterContinental Hotels Group (IHG), Millennium & Copthorne MEA, Dusit International, Accor, Yotel and Premier Inn are just a handful of the big names mapping out substantial mid-market brand expansion in Dubai and the wider Gulf region by 2020, while local players including Emaar Hospitality Group, the Jumeirah Group, R Hotels, TIME Hotels, HMH – Hospitality Management Holdings and Shaza Hotels are adopting a similar plan of attack.

Each mid-market brand has its own attributes, but they broadly fall into two categories. The global players are focusing on funky design-led concepts where the traditional hotel environment is deconstructed and very much targets Generation Y or The Millennial, whereas local operators are more Arabian hospitality centric, some offering a halal or Shariah-compliant environment with the Muslim and family markets in mind.
The common ground for all is the technology offering, with most mid-scale properties pitching themselves as ‘smart hotels’ for guests wired-up and on the go.They are also spelling out the message that mid-market does not mean cheap and cheerful, but rather good value for money. Dubai’s Department of Tourism and Commerce Marketing (DTCM) prefers the term “affordable luxury” that caters to travellers on a “more restrictive budget”.

Regardless of how it’s badged, mid-scale accommodation is in hot demand and more properties in this category are desperately needed if Dubai is to continue to broaden its appeal and reach its ambitious visitor targets.
It provides the destination with a real opportunity to show the rest of the world how glamourise the three- and four-star hotel sector by showcasing new concepts that will set a global benchmark.

The spotlight theme for ATM 2016  will be mid-market travel.


 

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