DAMAC Properties Developing 8,000 Luxury Serviced Hotel Apartments to Cater to Demand

Dubai Hotel Boom Set for 2016; Occupancy Rates Average 84% This Year

Dubai’s drive to see 20 million tourists visiting the Emirate by 2020 will see the current hotel capacity reached within just three years, said senior executives from DAMAC Properties.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has set the visionary target as Dubai bids to win Expo 2020. Last year the number of tourists topped 10 million for the first time and Dubai International Airport became the busiest in the world.

The latest Hotstats report on the hotel industry for the Middle East show that occupancy rates in the first quarter of 2013 stood at 83.9%, up from 77.3% in the same period last year. Total Room RevPar (Total bedroom revenue divided by the total available rooms) had also jumped to US$ 237.13 from US$ 201.35. Average Room rates also followed the upward trend, jumping from US$ 260.46 in Q1 2012 to US$ 282.72.

This was supported by the recent Ernst & Young Middle East Hotel Benchmark Survey which reported that Dubai’s overall occupancy rate was 83.6%. In addition, RevPAR increased by 10.4% year-to-date and 6.8% in terms of monthly performance, as average room rate also increased by 7.3% year-to-date and 6.4% in terms of monthly performance.

DAMAC Properties is developing almost 8,000 luxury serviced hotel apartments, spanning 8.2 million sq. ft. over the next three years, in addition to the Paramount Hotel, Dubai to cater to the increased demand.

“Even with more hotels coming online in the next few years, Dubai’s exponential growth as an attractive global tourist and business destination will see demand exceed supply by 2016,” said Ziad El Chaar, Managing Director, DAMAC Properties. “The luxury serviced hotel apartments sector is currently underserved, despite a huge desire for visitors to experience five-star services in the comfort of their own homes.”

The company is focussing its delivery on hotel apartments in the Burj Area of Dubai – a district which attracts more than 65 million visitors a year and has become the central hub for both visitors and tourists.

The Signature in the Burj Khalifa area of Dubai, DAMAC Properties’ first hotel apartments’ project began handover last month, with 355 units overlooking the world’s tallest tower. The project will be run by DAMAC Maison, the company’s luxury management and services arm.

Other projects to be completed this year by DAMAC Properties include Capital Bay, The Cosmopolitan, Water’s Edge and The Vogue. The Distinction, Upper Crest, Bay’s Edge and the iconic DAMAC Towers by Paramount are also set to open by 2016.

“In just three years, 2016, Dubai will see a year that will reinforce Dubai’s position as a global leader for luxurious hospitality, stunning real estate and unrivalled opportunities,” added El Chaar. “Luxury serviced apartments offer not only an ideal family living experience, but also a smart strategic investment.”

Dubai is undergoing resurgence in infrastructure development which includes major new master developments, hotels, world-restaurants and theme parks. Dubai World Central – Al Maktoum International Airport will also open its passenger terminal later this year.

The latest report from the Dubai Economic Council (DEC) for Q4 2012 shows that real estate in Dubai has grown by 94% compared to the corresponding quarter of 2011, with the average price per square metre for apartments increasing by around 3%.