The Dubai hotel operator Roda Hotels will open more than 1,000 rooms by 2018 on Dubai creek as it seeks major expansion ahead of Expo 2020. They will form part of its 8 million square feet Jewel of the Creek project.
The operator is the hospitality unit of developer Dubai International Real Estate (Dire) and is also set to manage beachfront and midscale hotels on Dubai Canal and Al Garhoud area by 2020.
The total cost of the projects is about Dh8 billion, financed through local banks, according to Imad Elias, the chief executive of Roda Hotels. The city had 78,184 rooms in November, or a 5.5 per cent increase year-on-year, according to the latest data available from research company STR Global.
“We are investing in the slow period, taking advantage of the competitive construction costs and soft costs,” he said. “There are some minor setbacks because of the political situation in Syria and Yemen and oil prices but this is temporary and Dubai never stops.” Dubai room rates, however, have been dipping because of the large number of rooms flooding the market.
During November, the average daily rate declined by 7.1 per cent to Dh889.13 year-on-year as the average occupancy rate dipped by 2.9 per cent to 83 per cent, according to the research company STR Global.
“The best strategy now is to lower rates, make it affordable for families and businesses, and we can sustain the lower rates,” Mr Elias said. “The drop this year is expected to be 10 to 15 per cent over last year, though it depends on the locations and properties near Burj Khalifa or the beach are not expected to be affected.”
The Dh4 billion first phase of Jewel of the Creek project, set to open in August next year, will feature a five-star, 560-room hotel and 780 furnished apartments besides a parking space for 6,000 cars, a 70-berth marina and 20 restaurants. It is about 75 per cent complete.
The next phase includes a budget hotel with 403 rooms and a lean staff model. Costing Dh2bn, the phase would also include a 450-room four-star hotel, two Sharia-compliant furnished hotel apartment towers with 480 units and a Dubai Dome with a multipurpose hall with a capacity for 3,000 people, restaurant, a music hall and a mini-shopping mall for upscale brands.
The hotel operator, founded one-and-a-half years ago, will also manage a 750-room beachfront resort in Jumeirah on the banks of Dubai Canal being developed by Dire. The Dh1.5bn property would also have a 250-unit furnished apartment tower. It is expected to be ready in three years.
Also around the same time, it expects to complete a cluster of two hotels in Al Garhoud area near Dubai International Airport at a cost of Dh1.5bn. The three and four-star hotels would have 1,000 rooms between them.
Despite the influx of rooms coming into the Dubai market before 2020 putting pressure on room rates, the operator is confident demand will get a boost from new attractions such as the Dubai theme parks.
“After we have finished the Dubai projects, we will go to Abu Dhabi, Oman and Qatar,” Mr Elias said.
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