Dubai: hotel investment capital of the world

The sell-out MEED conference attracted the who's who of the global hotel industry and a total of 525 delegates packed into the Madinat Jumeirah for Day One. They did not have long to wait for confirmation that Dubai is the hottest hotel market on earth with the most visionary projects.

The event opened with a video presentation of the Dubai Waterfront. This new city to house 500,000 upscale residents is truly breathtaking in scope, particular in view of the fact that Dubai probably has around half that number of upscale residents today.

Nakheel CEO James Wilson invited investors to join Dubai as shareholders in this massive project which comprises 250 planned communities and the Arabian Canal, the largest manmade waterway since the Suez and Panama canals.

Viewed against this backdrop the hotel sector's commitment to build 30,000 more rooms in Dubai over the next four years appeared almost a drop in the ocean.

Dubai ahead of Las Vegas

But as a spokesman from Deloittes pointed out this increase is needed to meet the expected surge in demand for hotel bedrooms over this period, and it puts Dubai ahead of Chinese cities and Las Vegas in per capita hotel investment.

Right now the Dubai hotel industry is red hot, with occupancy levels above 80% and room rates on the Jumeirah Beach strip at $150 per night, the highest in the region. Under these circumstances almost any hotel project looks a great investment.

But every silver lining has a cloud. Jumeirah Beach International CEO Gerald Lawless reminded the conference that the strong euro was maintaining the flow of European guests and that an upward swing in the dollar would be bad for business. On the other hand, the biggest prospective markets for new guests are probably Russia and China, both dollar-linked economies.

Many conference speakers alluded to the global location of Dubai - straddling east and west - as a major advantage, aside from year-round sunshine. There was also universal admiration for the long-term vision of the emirate's ruler and its infrastructure.

Meanwhile, with so many hotels under construction, there is a serious shortage of international brands to badge them. The big hotel management groups are clearly delighted that their competitive position in negotiating management contracts is so strong in Dubai, and perhaps that was another reason for the smiles all round this week.

In short, this conference radiated universal optimism about the business outlook for the hotel sector in Dubai.

Nowhere is more symbolic of this phenomenon than the manmade The Palm, Jumeirah where some 37 hotels are under construction including the giant Atlantis hotel; in only a couple of years The Palm, Jumeirah will become the most famous new hotel destination in the world.

Doomsayers have been predicting the end of the Dubai tourism boom for the past decade, and have always got it wrong. Today they mainly stay silent.