HOTEL investment services firm Jones Lang LaSalle Hotels has reported that 55,000 luxury four- and five-star hotel rooms are expected to be completed in the next five years across the UAE.
Dubai is leading the market with the confirmed development of more than half of all projects, followed closely by Abu Dhabi.
Arthur de Haast, global CEO Jones Lang LaSalle Hotels says, “Last year the confirmed pipeline of projects that were under construction or in advanced stages of planning stood at around 35,000 rooms. In 2006 we have seen a rise in new development schemes emerging to meet the country’s increasing tourism and business travel requirements.”
Thierry Loué, managing director Jones Lang LaSalle MENA, says “This activity is being driven by an abundance of capital seeking real estate, strong market fundamentals, signi-ficant growth in intra-regional travel, and greater aware-ness of Dubai and Abu Dhabi as tourist destinations.”
By comparison, Las Vegas has the world’s second largest hotel development pipeline with 42,000 rooms, Macao follows with 27,000 rooms and China’s Shanghai and Beijing with just 11,000 and 12,000 respectively.
Besides the significant investment being made within the country, rapidly increasing outbound capital flows from the Middle East are also expected.
Middle Eastern investors, primarily from the UAE, invested just under $1 billion in European hotels in 2005. In 2006 the same level of investment in the first half of the year alone has been observed, with Middle East investors eager to explore opportunities in Asia and Europe. Arthur de Haast explains, “Traditionally Middle Eastern investors were primarily attracted to iconic trophy asset hotels, but now the more soph-isticated Middle Eastern investor is competing for assets across the hotel spectrum and often teaming up with in-ternational private equity firms to acquire large portfolios of assets. Their activities outside the region are also causing foreign investors to look again at the region and we now seing signs of foreign interest in inward investments.”