STR Global: Half of hotel rooms in regional construction pipeline are in the luxury sector (UAE)

Due to the high percentage of upscale hotel developments in the Middle East construction pipeline, over the last five years The Hotel Show has witnessed a steady increase in the number of high-end and luxury suppliers participating at the show, as their more traditional upscale markets begin to stagnate.

In a recent study, research company STR Global shows that 48.7% of hotel rooms in the regional construction pipeline are in the 'luxury' and 'upper upscale' sectors. Upper upscale rooms command room rates in the top15% price bracket. The company also reports that a total of 940 new hotels will open in the MENA region by the end of 2012, compared to just 678 in the Europe.

"When you consider that the euro zone including the UK has a population of well over 385 million, the figures for MENA certainly stack up favorably," said Frederique Maurell, Director of The Hotel Show.

Indeed although occupancy and room rates in five-star hotels in Europe and the US are stabilizing, they are still some way off their peaks. In New York for example, according to Smith Travel Research an average of all hotel rates remains substantially below their September 2008 peak, with occupancy rates at 55.8% down from a high of 63.1% in November 2007.

Meanwhile over in London, it is a similar picture, with overall occupancy rates falling 5% and average room rates falling US $11 since end of 2008.

"While luxury rates have been subject to downward pressure for the last two years or more it is difficult to justify any significant investment in luxury properties. By contrast the Middle East's luxury market is clearly thriving, providing more potential business for high-end suppliers than many other markets in the world," added Maurell.

Adding even more weight to Maurell's claims,, meanwhile, reports that the Middle East and East Asia has €58.9 billion tied up in first class and luxury hotel projects.

"It's easy to see why this trend is accelerating. The Middle East has proportionally more, high net-worth individuals than any other region and a rapidly growing population with a culture of traveling and for GCC residents, tax-free incomes. Arabs are prepared to spend on luxury travel, hospitality and leisure activities," said Maurell.

"These indicators highlight what many industry commentators have suspected all along, that the Arabian love affair with luxury, is not going to end anytime soon, despite the recession," added Maurell.

Last year's event attracted 363 exhibitors, from 35 countries, covering 25,000 m² of gross space including luxury suppliers across 4 industry sectors. International luxury companies supporting the show included Spanish outdoor furniture maker, Gandia Blasco, German bedding manufacturer, Muehldorfer and internationally renowned bathroom and tableware brand Villeroy & Boch.

Thanks to the protracted hotel development pipeline, The Hotel Show 2011 which takes place at the Dubai World Trade Centre from May 17-19, is expecting solid 20% growth led in part by participation from countries including China, Germany, the UK, Turkey, Spain, Italy, Cyprus and Greece.

The main exhibition is split into four sectors; Interiors & Design; Security & Technology; The Resort Experience; and Operating Equipment & Supplies, each housing a number of new subsectors, including green energy supplies, front of house reservation systems and light catering equipment. However Maurell is currently researching whether there is demand for significant sub sectors.

"Events such as ours naturally evolve and with the continuous growth of the show over the past 12 years, some of the traditional sectors might become a victim of their own success. Therefore we are currently testing the market to ascertain whether dedicated sections for guest room automation, reservation systems, sustainable products are viable at this stage," said Maurell.

The Hotel Show 2011 will also bring leading industry figures together for the Seven Star Conference, as well as discuss health and beauty trends at the Middle East

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