THE growing regional demand and burgeoning tourism industry in the Middle East represents unprecedented opportunity to hotel investors and operators for budget /midscale hotels. In recent times, the GCC has become a hotspot for budget hotels, a market which is traditionally dominated by luxury and upmarket hotels. The future it is said will be in the mid-scale, budget and limited service hotels as the budget market is a lucrative one for hoteliers offering stronger investment opportunities, lower construction costs, and exceptional returns on investment even at modest occupancy levels.
New budget hotel brands are entering the region with great speed and are set to revolutionise the range of choices for the budget conscious travellers in both the corporate as well as leisure segments. A new brand was introduced in June when Wyndham Hotel Group signed a master franchise agreement with the SASCO (Saudi Automotive Services Company) to develop 20 Super8 brand budget hotels in Saudi Arabia over the next five years. The introduction of the Super8 brand aims to meet the needs of the domestic tourism sector in the kingdom, estimated at 24 million people last year (2011).
The introduction of the brand into the Middle East comes just months after an announcement at the International Hotel Investment Forum (IHIF) in Berlin early this year about the Super brand’s launch in Germany.
Millennium & Copthorne Hotels is also actively looking to bring its three star budget brand Studio M to the Middle East & Africa market with an initial focus on major GCC cities. Also targeted at business travellers it will provide ample working spaces downstairs and bed spaces upstairs.
According to TRI Hospitality Consulting research some of the internationally branded hotel chains which currently offer more thn 8,300 rooms and which have a presence in the GCC are:
Holiday Inn Express (or Express by Holiday Inn as it is known in Europe, Middle East, Africa and Asia Pacific) is one of the fastest growing hotel brands in its segment. Holiday Inn Express offers competitive rates for both business and leisure travellers. All hotels are limited service and feature complimentary breakfast, a clean fresh room and Priority Club Rewards benefits. It is one of the nine IHG brands and has four hotels in Dubai. A new 274 room Holiday Inn Express opened in Bahrain on August 2012 and two hotels are planned for Jeddah opening by 2014 and one in Madinah.
Tulip Inn is one of the three brands of Golden Tulip and has the biggest presence in the GCC with around 1,636 rooms. Tulip Inn hotels are conveniently located in city centres and busy districts and deliver quality accommodation. There are five Tulip Inn hotels in the UAE and Nine in Saudi Arabia. A 180-room Tulip Inn Makkah is scheduled to open later this year. Although a budget brand, some of its hotels in Saudi Arabia are rated as four-star hotels.
Best Western International sees a bright future for its hotels in Saudi Arabia with a fast growing economy driving the travel business sector and a big jump in the pilgrimage traffic. It opened two budget hotels in the Kingdom in the first eight months of the year. By 2015 more than 1,500 hotel rooms are expected to open in the region.
Ibis, the worldwide economy hotel brand of the Accor group, offers consistent quality accommodation and services in all its hotels: a well-designed and fully-equipped en-suite bedroom, major hotel services available 24/7 and a wide choice of on-site food and beverage options. Accor has around three Ibis properties lined up for Saudi Arabia (Riyadh, Yanbu & Jeddah) and hotels in Fujairah and Abu Dhabi as well. Currently it has five hotels in Dubai, one in Oman and two in Kuwait.
The popular Kingsgate budget brand from Millennium & Copthorne is also ideally suited for business travellers with its high international quality standards, no fuss, and great value. Its latest property to open is in Doha after having been present in Abu Dhabi since 2008.
Park Inn by Radisson is a mid-market hotel brand of The Rezidor Hotel Group offering hospitality at a competitive price. In 2010, Park Inn was rebranded as Park Inn by Radisson linking the two core brands and adding the strength and reputation of the original Radisson brand to Park Inn‘s impressive growth. The awareness of Park Inn by Radisson is growing, thanks to openings in Abu Dhabi, Muscat and Al Khobar. It is also poised to benefit from the region’s acute lack of international-standard, midmarket hotels. Apart from the hotels in Muscat, Abu Dhabi and Al Khobar, Park Inn has two more hotels lined up for Saudi Arabia (one for Riyadh and one for Jeddah) both with an expected opening date of 2014.
Centro, Rotana’s budget brand has plans to open 25 properties across the Middle East by 2014 and hopes to meet the demands of the new generation of travellers who seek functionality at reasonable rates. Young and fresh in its approach, Centro is a contemporary concept which has been thoroughly researched resulting in a new, highly efficient operational model, which provides essential amenities and necessities specifically, geared to the travelling executive. There around four Centro hotels in the UAE and one each lined up for Dubai, Abu Dhabi & Riyadh.
Premier Inn is the UK’s largest hotel brand, with over 40,500 rooms and more than 600 hotels. The first Premier Inn in Dubai to open was a 300-room hotel at Dubai Investment Park. A similar size hotel at Dubai Airport (281 rooms) and a 230-room hotel at Dubai Silicon Oasis on Emirates Road, were also opened. There are plans to open more hotels in the region.
Other local brands including the Corp Executive (HMH) and Citymax (Landmark Group) have several budget /mid –market hotels in the UAE and the wider Middle East region.
TRI Hospitality Consulting undertook extensive research to provide the most updated list of current supply at the time of going to the press.
By Semeen Ghazi