UAE: Ras Al Khaimah Beach Resorts Offer Untapped Development Opportunities

Ras Al Khaimah offers untapped development opportunities for the mid-market hotel segment, especially in simple yet efficiently designed resorts with modern amenities and meeting facilities or large-scale, family friendly resorts, according to a May 2017 study by Colliers International Hotels division.

The study's conclusions also state that development potential in the emirate also exists for wellness resorts, branded serviced residences within resort properties, eco-friendly destinations as well as new food and beverage product offerings.

The driving factors supporting the study's conclusions include the emirate's ease of accessibility, the authorities' focus on the tourism industry, its stable leisure market demand and solid year-on-year hospitality market performance and growth.

The study showed that Ras Al Khaimah beach resorts, in particular, have shown a higher profit conversion when compared to other similar regional markets.

For instance, when zeroing in on a comparison of profit conversions among resorts in Ras Al Khaimah's Al Marjan Island versus resorts in Dubai's The Palm Jumeirah and Abu Dhabi's Saadiyat Island, Al Marjan showed a 40% profit conversion whilst both The Palm and Saadiyat registered lower profitability at 33%.

In addition, growth in overall hotel market performance in the emirate is driven by beach resorts, which have the ability to command higher ADRs higher due to large concentration of internationally branded five-star supply.

According to the study, in 2016, beach resorts in the emirate recorded nearly 10% increase in occupancy rates reaching 71% and a 13% increase in visitor arrivals to beach resorts, capturing 82% of total visitors to Ras Al Khaimah.

Because of this, the study indicated, hotel RevPAR performance in the emirate has withstood the increase in overall supply and changes in source markets.

The study added that, even though the emirate currently lacks the international presence of Dubai and Abu Dhabi, Ras Al Khaimah, given its more affordable land prices, actually offers a similar or even more attractive return on investment for hotel owners, investors and developers.