With a 2023 a ‘normal’ year with no major events such as the EXPO or the FIFA World Cup, Dubai is once again at crossroads in terms of positioning itself as a relevant destination. The potential to gain traction as a luxury destination has been and remains exceptional, however, a concerted effort is required including an even more sharp targeting of source markets which have been changing post pandemic but also in the context of the ongoing war in Ukraine.
Atlatis Royal is the first new top luxury resort to open in almost a decade, with Jumeirah Marsa Al Arab, The Lana by Dorchester Collection expected to open in 2024. The only present direct competitor for Atlantis Royal Dubai is Bulgari Resort Dubai. Post pandemic and post Expo / FIFA World Cup the focus of the five star hotels and resorts has rightfully been on diversifying and upgrading F&B offerings, many of the new openings being tightly linked to entertainment.
Renovations must become a top priority! Over 70% of the luxury hotel inventory is dated and tired, with no major renovations planned in 2023. Luxury properties such as Burj Al Arab, One&Only The Palm, One&Only Royal Mirage, Park Hyatt Dubai, Armani Hotel Dubai and Raffles Dubai – have not been renovated since opening – more than 10 years ago. This creates a gap and a major weakness, especially when it comes to value.
This has also created opportunity for key players such as TAJ who opened last year its third property in Dubai, TAJ Exotica Dubai, The Palm, an exquisite luxury resort of the highest standards which has a an impeccable product and boasts consistently high service standards. Nevertheless, considering Dubai overall as a destination, TAJ Exotica Dubai The Palm has had to open and continues to operate with rather low rates.
The weakness of many international established hotel brands and operator has given way for development for locally developed brand such as Emaar‘s Address Hotels, which should focus on further strengthening in the U.A.E rather than stubbornly aim at expanding abroad. We, at CPP, do not think that Address Hotels is ready to expand even in the Middle East, let alone farther in established destinations. Also, mention must be made that several Address Hotels require renovations!
The arguments or rather to say USP’S related to the weather (warmer in winter), expansive shopping (especially luxury) and dining – no longer suffice. Wellness (Spas) and exceptional dining & entertainment are among the strategic directions which Dubai as a destination can further excel at. Hotel dining venues can and must be upgraded, regardless if the property is city (urban) located or a resort and the recipe of mostly franchising international dining concepts may not be a sole answer.
Unless further investments and re-positioning are made fast, Dubai may not be able to even sustain the current rates, which are lower at the moment even compared with pre pandemic and during the pandemic levels.
The well established and well positioned five star players with exceptional further potential for growth:
Caesar’s Palace Dubai
Nikki Beach Resort Dubai
Four Seasons Resort Dubai at Jumeirah Beach
Four Seasons Hotel Dubai at DIFC
Ritz-Carlton Dubai JBR
Mandarin Oriental Jumeira Dubai
Jumeirah Al Naseem
Jumeirah Emirates Towers
TAJ Dubai JLT
Waldorf Astoria The Palm Dubai
Waldorf Astoria Dubai DIFC
W Dubai The Palm
Melia Desert Palm
Habtoor Palace LXR
V Curio Dubai
Kempinski Mall of Emirates
JA Lake View Resort
Andaz Dubai The Palm
St Regis Dubai Downtown
St Regis Dubai
Bab Al Shams (Kerzner)
Hotels which are over-rated as being five star:
Marriott Dubai The Palm
Hilton Dubai The Palm
25 Hours Dubai
Rixos Premium JBR
Rixos The Palm
Kempinski Dubai The Palm
Radisson Resort Palm Jumeirah
Radisson Blu Canal View
Hotels which are over-rated as luxury:
Raffles The Palm Dubai
Jumeirah Beach Hotel
Hotel Indigo Dubai
Properties which are dated / tired and require immediate and extensive renovations:
Anantara Dubai The Palm
The Ritz-Carlton DIFC
Grosvenor House, Luxury Collection
Fairmont Dubai The Palm
Intercontinental Dubai Marina
Intercontinental Dubai Festival City
Al Maha, a Luxury Collection Resort & Spa, Dubai
Jumeirah Zabeel Saray
Jumeirah Al Qasr
CPP is conducting all January 2023 an extensive overview and analysis on Dubai as a luxury destination, looking closely at both luxury hospitality and luxury retail – to understand regional and international positioning and opportunities for future growth – medium and long term. The comprehensive analysis will be published early February in 3 parts.
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