Drees & Sommer: Dubai hotels need "more than a refurbishment"
Consulting firm’s MD says designs, construction of hotel rooms will change; and staff accommodations will become obsolete
Dubai’s hotel industry will need to be repositioned across three key aspects, including business models, physical assets, and brands, according to Filippo Sona, the managing director of Global Hospitality at European consulting, planning and project management enterprise Drees & Sommer.
Construction Week’s sister title Hotelier ME pointed to STR’s October 2019 hotel pipeline data in November 2019, which showed 434 projects –119,991 rooms – in construction in the Middle East, and 135 projects and 24,939 rooms in construction in Africa.
Reacting to the figures, Sona commented that hotels built prior to 2010 will need to be repositioned in order to compete with the new supply coming online.
Sona said: “The repositioning of physical assets will require more than a refurbishment. Dubai is a spectacular destination, with visitor numbers increasing year-on-year, but $180-200 (AED 661-735) is going to be the new average five-star room rate and properties need to be designed accordingly. Potentially, this means hotels will need to have room sizes equivalent to those in other key global markets, such as London, New York and Amsterdam.”
“Will the Dubai hotel of the future have 45sq m rooms? No; the investment required will be too high per square foot, which doesn’t make sense in today’s economy. Hotel brands will need to be onboard with this change too, and ensure their product meets the needs of the future market dynamics,” Sona added.
Recently appointed as a member of the International Society of Hospitality Consultants, Sona also pointed to a bigger issue in the market.
He said: “The main issues surround the business model. For example, staff accommodation, currently provided by hotel owners in Dubai, is a massive cost that is neither sustainable nor necessary. It will become obsolete. This is for two reasons.
“Firstly, Dubai’s residential market is stable but expanding, and there will be units coming online that hotel employees can afford to rent. Secondly, the trend towards outsourcing hotel services, from security to housekeeping, is growing and coupled with developments in technology that will make hotel operations more efficient, hotels will require smaller workforces in the future.”
This will be a dramatic change to well-established business models, requiring a shift in the mindset and a gradual repositioning that will start now and take place within the next 10 years, Sona concluded.