The good life (page 1 of 3)

By SHILPA MATHAI MUSCAT

As of June, there were a record 978 hotels and 9,980 rooms in the Gulf with more in store - local chains and international operators are leaving no brick unturned in their quest to build the biggest, tallest and most fanciful property on earth.

"The regional hotel industry witnessed an unprecedented upswing last decade," says Paul Rouse, managing editor of Hotel Intelligence Middle East. "This trend looks set to continue - sunshine sells and the volume of international tourists is expected to increase from under 15 million a year to 69 million by 2020. Business travel is also driving the industry forward, particularly the lucrative conference and incentive market."
Diversity. Hoteliers across the region agree that the market is indeed growing and diversifying. Even in Dubai, known for its constantly burgeoning hotel supply, occupancy levels remain constant at 60 percent and the average room rate at 365 dirhams ($100), which means that most of the 250 percent increase in hotel supply over the last 10 years has been successfully absorbed. The fastest growing Gulf cities are Dubai and Mecca, where international chains are jostling to capture a slice of the highly lucrative but seasonal pilgrim market. Oman topped the league tables with a massive 59 percent growth in hotel supply.

The highest room tariffs in the Gulf are in Kuwait, a largely business-oriented static market. A fixed minimum rate is applicable for Kuwait's one four-star and four five-star hotels. "This arrangement has been working successfully and sustains hotel profits," says Guy Standish Wilkinson, a managing consultant with TRI Hospitality Consulting in Dubai. Local chain Safir International dominates Kuwait in terms of the number of properties. The other Arab operator, the Abu Dhabi-based Rotana hotel chain, says that it has its own designs on Kuwait.
Bahrain attracted 3.3 million tourists last year to its 73 hotels and 5,406 rooms and is working on increasing these figures. Analysts say it could do with more beach properties. Now that the Hawar Islands are back under Bahraini control, future developments are earmarked there.

Neighboring Qatar's gas boom energized its hospitality sector; occupancies averaged 60 to 70 percent last year - up from around 35 percent in 1990 - with current estimates running at 65 to 70 percent. Hotels have been making money despite a new Inter-Continental property coming on board in November 2000; the additional supply of 300 rooms led other players like Sofitel, Ramada, Marriott and Sheraton to upgrade their facilities.

"There is a squeeze on average room rates," says Gabriel Fernandes of Sofitel Doha. More hotels are in the pipeline - Ritz Carlton promises a spectacular show when it unveils its 374 rooms in September. A Four Seasons, Holiday Inn and a couple of independent properties are under construction. Various other chains have also been talking of opening up shop on the "Costa del Doha." The city is just waiting to take off and is touted to be another Dubai in the making - though, for now, that's a stretch.

"Qatar is rapidly emerging as the location for premium meetings and high-end conferences, which is why the Ritz Carlton is building its international, flagship hotel here," says the hotel chain's Doha general manager, Darrell Sheaffer. "The WTO summit is slotted for November this year, the Asian Games for 2006. The country offers huge potential for ecotourism - the flavor of the month - and there are some good sporting events as well.