Wednesday, 26 April 2017

UAE: Ras Al Khaimah Low Supply Of Hotel Rooms

Whilst other locations grapple with the issue of oversupply, Ras Al Khaimah continues to face the opposite problem: undersupply.

“There is a significant pipeline of hotels and resorts in the emirate, that are expected to barely meet the increasing demand,” Yannis Anagnostakis, CEO of RAK Hospitality, said in an interview on Wednesday.

The emirate has 3,600 hotel rooms, and will need to add an additional 4,000 room by 2018 to cope with demand.

“I believe that by next year we will be slightly undersupplied,” Anagnostakis said, adding: “we need to catch up and expedite the delivery of new hotels in the emirate.”

RAK is targeting 1 million arrivals by the end of 2018, and will need to increase its capacity to deal with this demand.

In the coming years, Mövenpick, InterContinental, and the Hilton have all confirmed they will be expanding their presence in the emirate.

The first of these will be the 240 room mid-market Hilton Garden Inn, developed by RAK Hospitality, set to open later this year.

“We are not afraid of the competition, and our confidence comes from the fact that we know we’ll reach a point of undersupply within the next 12 months,” the CEO said.

Inventory

There is a current pipeline of 3,000 rooms for the next three years, although if RAK sees the visitor numbers it has set out to achieve, these additions to the emirate’s inventory will quickly be swallowed up, creating an undersupply situation again.

“There is talk of 5,000 more keys coming, and over the next 10 years we expect the inventory to triple,” Anagnostakis said.

A large growth in visitor numbers from China, India, and Europe has necessitated this increase in hotel rooms, and the emirate’s hospitality authorities are looking towards developments like the Al Marjan Island to provide the capacity.

“Ras Al Khaimah needs in the next 10 years around 15,000 hotel keys, and we are targeting 8,000 of those rooms to come from Al Marjan Island by 2025,” Abdullah Al Abdooli, Managing Director of Al Marjan Island, said in an interview with Gulf News.

Al Marjan Island is a man-made archipelago consisting of four islands, and covering a total area of more than 2.7 million square metres.

Investment

The development currently has 1,500 operational hotel rooms.

Such an increase in capacity on the island “will require billions of dollars” of investment, according to Abdooli.

According to the senior executive, the majority of this investment will come from Asia.

“We are targeting Russia, China, India, and Europe — especially the UK, for investment,” he said, adding that the majority was coming from the first three countries.

Despite saying that he was satisfied with the regulations surrounding the hospitality sector, Abdooli added that as the emirate’s tourism sector developed, so should the legislation.

“Whilst we currently have good rules and regulations, we would like to develop them, to make the emirate more attractive,” he said.