Luxury hotels building outstripping demand
In the recently published CABI tourism book Sustainable destination branding and marketing, chapter authors Andy Heyes and Sanjay Nadkarni discuss Brand Dubai: Sustaining its Luxury Image.
Dubai is known for its opulence and indulgence – boarding on the extravagant, with mega hotels and resorts famous for their hospitality. Hotels in Dubai range from homegrown chains such as Jumeirah, to international luxury hotel brands like Four Seasons and Shangri La, one thing they have in common along with the high-end service is brand maintenance and identification.
Some of the most notable hotels in Dubai are the Burj Al Arab, the world’s first hotel solely built on a human-made island, and the Armani Hotel situated within the Burj Khalifa, the tallest building in the world write Heyes and Nadkarni. Not only have these iconic hotels put Dubai on the map, they have cemented the emirate in international top-spot for opulence and luxury.
The authors attribute Dubai’s rise as a luxury tourism destination, from not only its geographically location (perfect for long-haul stops), but by an effective branding strategy spearheaded by Emirates Airlines.
International visitor spending is the highest in the world, above London in second place, in 2016 the emirate welcomed over US$31.3billion in spending.
Researchers estimate that the hospitality segment contributes around 21% of tourism sector’s carbon footprint, this is no doubt higher in Dubai. While Dubai in an ideal transport location the emirate is resource constrained, with water and other natural resources hard to obtain.
The burgeoning luxury hospitality industry, there has to be sustainability improvements in the logistics, infrastructure, connectivity and knowledge (LICK) economy that provide the services in Dubai.
The predictions on hotel supply show Dubai will provide 140,000 to 160,000 rooms by the end of the year 2020, increasing the number of current hotels and the additional of more luxury accommodation. However, this does not take into account the COVID-19 pandemic on Dubai’s travel and tourism industry.
Pre-pandemic the hospitality industry saw a decrease in the occupancy and Average Daily Rates (ADR) of hotels in Dubai, these was attributed to the increase in available hotels. There were concerns back in 2019 about the excess and oversupply of hotel rooms in destinations like Dubai, as demand for luxury hospitality had plateaued, but investment in the hospitality industry still grew. (Divecha 2019)
Post-pandemic there will certainly be a decrease in those who can afford to seek luxury hospitality in destinations such as Dubai. The international travel and tourism economy has felt the sharp contractions of the pandemic, with visitor numbers way down on what was predicted as year of unrivalled growth. This will certainly mean more competition between luxury hotels in Dubai as there are less visitors but more resorts and services fighting for them.
References
Divecha D. (2019) Will Too Many Empty Hotel Rooms in Middle East Require a New Business Model? Skift - Aug 05, 2019 https://skift.com/2019/08/05/will-too-many-empty-hotel-rooms-in-middle-east-require-a-new-business-model/ [date access 14/01/21]
Sharma, A., Pulido-Fernández, J. I., Hassan, A. (2019) Sustainable destination branding and marketing: strategies for tourism development. CABI. Chapter authors Heyes A., Nadkarni S. (2019) chp Brand Dubai: Sustaining its Luxury Image https://www.cabi.org/leisuretourism/FullTextPDF/2019/20193512516.pdf