First with Financial Comment from Arabia

Six new Palm Jumeirah hotels over the next 12 months

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Dubai will open up to six new beachfront hotels on the Palm Jumeirah over the next 12 months, inevitably adding to room price competition and forcing down rates but securing the emirate’s position as the sunshine holiday capital of the Middle East.

The iconic Atlantis Hotel which opened 18 months ago is currently the sole hotel on The Palm Jumeirah Island. It is about to face some strong competition from new luxury hotels.

Luxury hotels

First to launch in the second quarter will be the 410-room Zabeel Saray by Rixos, a development that includes 38 residential villas. Then in October the 293-room, six restaurant Royal Amwaj from Movenpick will open with an all-in guest dining package available (pictured above).

Movenpick director of business development Guy Epsom told ArabianMoney the hotel had received a very good reception at the recent ITB hotel exhibition in Berlin with travel agents saying there was big demand for Dubai now that room prices are down.

The One&Only The Palm is also due to open in October, a 100-unit, Arabic-themed, low-rise development with an over-water restaurant and spa. Last hotel to launch this year will be the Jumeirah Al Fattan.

2011 openings

Still to come in 2011 are the 320-rooom The Emerald Palace Kempinski, opposite the Golden Mile and delayed for two years after the global financial crisis, and the massive Fairmont Palm Jumeirah with associated serviced apartments.

From a business perspective the opening of so many hotels in one location is clearly going to be a major marketing challenge. But at least the Palm Jumeirah Island is among the best known places in the Middle East and has already benefited from huge global publicity, good and bad.

Actually it is probably the European sunshine destinations that will feel the most heat from this competition. Dowdy old hotels with poor maintenance are struggling to keep pace with the super luxury offerings from Arabia, and can only compete on price which undermines their profitability.

All-in dining package

Movenpick is being clever by offering an all-inclusive dining and beverage package – Club Gulf rather than Club Med. This will go a long way to counter the impression of Arabian hotels as overcharging for food and drink. But doubtless all this new competition is going to force down bar and restaurant prices in the future.

For holiday makers there are going to be some great deals as the Dubai hospitality sector takes another leap forward, albeit not such a profitable one as in the boom years.


Written by Peter Cooper

March 24, 2010 at 8:39 am

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