Going up in the world

Originally appeared in Business Traveller

Dubai is an emirate driven by superlatives. It is by all accounts, the fastest growing city in the world with the largest amount of cranes and people working on the biggest, tallest, most opulent and imaginative variety of property projects anywhere.

So, if you plan to stay long-term or just overnight it is worth digging that little bit deeper to find out what types of accommodation Dubai has on offer and to discover what the future holds for the visitor with more than just sunshine on their mind.

Amongst its developmental peers, Dubai is the precocious teen that after graduation is still seen as the one most likely to succeed. It has become a desirable holiday destination and the stop-off point for long distance travel. Combined with a liberal economy and a wealth of free zones, hotels, resorts and corporate perks, it is an enviable place to set up shop or, for the tax breaks alone, at least appear to.

Significant growth in airline capacity continues to indicate an upturn in tourist and business travel in the region as a whole, and although higher fuel costs are starting to have an impact worldwide, it hasn’t affected the region yet.

Until recently however, despite increasing demand, the range of accommodation has been somewhat limited – albeit to a sparkling, smiling, five and four-star standard limitation with the occasional ‘seven-star’ thrown in for good measure. While this is ideal for the holiday market and those looking to make an impression, it isn’t always what is needed or demanded from a diverse market place.

Sometimes all that bowing and scraping, the sun-burnt hordes and homogenous styling is simply surplus to requirements for a business traveller who arrives in yet another fledgling economy with a delicate ego, in another time zone, and with a new set of social mores to navigate.

Dubai, as a maturing city, is always attempting to shake things up, and with new property laws, financial centres, legal institutions and property developments on the way, the stage is set for a spectacular increase in the types of accommodation available to the bleary-eyed briefcase set.

Dubai’s forward momentum is being driven by a property market that has seen an inordinate amount of growth in the three years since the government made it legal for non-nationals to own property. Linda Mahoney, CEO of Better Homes maintains that as far as growth, prosperity, the economy and development, “Dubai is probably the most dynamic area in the world.”

Equity has more than doubled in many areas of the city and although this has probably peaked in the short term, rental yields continue to grow. ‘Adjustments’ have been forecast for some time, but the introduction of a new freehold property law for expatriates promises to add further fuel to the market fire.

The law, announced in March, was brought in principally because the billions of dirhams of property advertised and sold to expatriates as freehold never actually were; they were simply a 99 year lease. Although the law has yet to come into effect, it will eventually mean that once a building is complete the freehold rights and deeds will then become the buyers. This is a unique and bold step for an Islamic state, where the regulations regarding ownership can be notoriously complex.

What the new law effectively provides is a get out clause for developments built by Nakheel, Emaar and Dubai Properties. The freehold rights will only be available in specific freehold clusters built by them, which at the time of writing have yet to be specified.

As a long-term strategy to sustain the standard of living and keep the economy growing it seems a sensible choice that may encourage expatriates to keep the money they earn invested in the host country, rather than repatriating everything, as is normally the case.

Since the new law was announced developers have launched projects worth billions of dollars, even though there are still a few issues with freehold allocation and maintenance that have yet to be resolved. For estate agents like Better Homes, new law or not, it’s business as usual, “We haven’t noticed any change, we just continue to be busy,” says Mahoney.

The most recent figures released by the Dubai Department of Tourism, Commerce and Marketing also reveal a hotel industry that is booming. Dubai hotels and hotel apartments recorded the world’s highest occupancy rate in January-September 2005. Deloitte and Smith Travel Research reported overall 86% occupancy rates for Dubai followed by New York with 83% and Singapore at 80%.

By close of business 2006, the peak month of December saw occupancy reach 91.5% overall with beach hotels hitting 96%, five-star 95%, four-star 96% and three-star hotels averaging 95%.

Recent developments in the hotel industry emphasise the strength of this market. For example, Starwood have taken over the Meridien chain and announced the launch of a W Hotel on the banks of the Creek in Dubai Festival City, which promises to be a luxury hotel with the personality of an independent hotel. Jumeirah on the other hand, are looking outward, and using their solid base at home to build its global brand in the Far East, North America and Europe. New developments and confident investors mean an even wider variety of hotel accommodation will soon become available.

Hotel apartments have already created a realistic and desirable solution for longer term stays, one that provides extra privacy and more room for family, work and socialising. However, the quality of properties varies widely and it is advisable to book either through a recognised chain, operator or website to be sure you get a proper hotel apartment rather than a short stay facility for another kind of professional.

Quality hotel apartments in Dubai range from centrally located three-star facilities, to the four-star Marriot Executive Apartments in Deira, the five-star Grosvenor House in the Marina and Dusit Dubai on Sheikh Zayed Road. Each provides one, two or three bed roomed apartments with views over the city skyline. One MD that Business Traveller spoke to checked into one of the Dusit’s apartments five years ago and liked it so much he hasn’t left since.

If high-rise living isn’t for you and something a bit more homely with even more room to practise your cat swinging is preferable, then the growing number of golf course villas could be a temptation you won’t want to resist. The renowned Dubai Creek Golf and Yacht Club has 92 four bedroom residential villas available for long-term lease, a 121 berth marina and the five-star Park Hyatt Dubai alongside its greens. The Montgomerie also has its own private villas and has recently opened a boutique clubhouse that offers suites on the 18th hole.

Villas also come without a golf course attached. Caravanserai supply four and six bedrooms villas with private pools in Emirates Hills, close to free zones like Media City, Knowledge Village and Jebel Ali. For groups, couples or families a week in one of these villas can cost less than two to three nights in some five-stars; they can also provide concierge services, maid and on-demand limo if you require a little extra luxury.

Dubaishortstay.com offers executive enabled rentals that, while without the services of Caravanserai or the Dusit, provide a cost effective five-star alternative that, according to their website, is regularly favoured by Microsoft, Cisco, Sun, McKinsey and BP executives.

Prices vary depending on size, location and service; a Caravanserai serviced villa that sleeps four starts at £1800 per week, a dubaishortstay.com villa from $2100 per week, while a four bedroom creek view villa, within putting distance of the green, will set you back AED 214,000 for the year. Four and five-star hotel apartments start at 960AED a night in the Marriot, 1100AED in the Dusit, and 1700AED for Grosvenor House.

Shared ownership is a relatively new concept for the Middle East but one that comes in a variety of packages, such as fractional ownership, condominium hotels or hotel residences. All of these options are currently being championed by major brands and luxury chains around the world, such as Hilton, Marriot, Ritz Carlton, Sheraton, Fairmont and Four Seasons.

Products entering the local market include Kensington Royale in Sports City, a five-star condo-hotel which, when not being used by the owner, is rented out as part of the hotel, a not dissimilar proposition to the freehold residences of the Mövenpick Hotel and Residence in Jumeirah Lakes. Alternatively if you really can’t get enough of that five-star lifestyle, buying into a dedicated apartment, townhouse or penthouse linked to the Fairmont Palm Residence on Palm Jumeirah may be more to your tastes.
One of the dynamics behind the growth of shared ownership properties in the Middle East is that they are well-suited to the Islamic concept of ‘Sukok’, the property document or deed compatible with the Islamic laws of the Gulf region.

According to Ms Noyes Thomas, Managing Director of RCI Middle East, “Sukok gives Muslims complete confidence in the knowledge that what they’re buying into is safe and acceptable.” This has already led to the growth of a novel new concept – the religious timeshare – for pilgrims visiting Mecca.

With 30,000 timeshare owners already in the region and strong interest from abroad, RCI Middle East projects a Dubai market worth a potential $2.8 billion dollars by 2008, and Mahoney considers it to be “a very essential component to the real estate market.” As with freehold property, legislation is expected sometime in 2006 that will establish best practice based on American and European standards.

These new business models can certainly have their perks. For example the idea of living and working aboard a super-yacht is usually only available to the Prince Walids among us. However membership of the IFA Yacht Ownership Club means that for a fraction of the cost of owning one, you can really make a statement, aboard your own fully crewed 23-27 metre super yacht. Usually considered a leisure option, each yacht easily sleeps eight. So if you do have business in the club’s cruising zones of the Gulf, the Mediterranean or the Red Sea you could even take your office and staff with you.

For those of us with accounts departments who like to keep a tight reign on expenses, shared ownership potentially provides more than one option to turn an expense into an investment. If the more tried and tested method of taxi-airport-plane-hotel is preferable, then a new range of budget brand hotels may provide relief from the hyperbole and high prices.

Average room rates across the region have risen steadily in recent years, which has created a growing demand for branded three-star hotel chains in the Middle East. Express by Holiday Inn plans to open a 240 room property in Knowledge Village in 2007 and has plans for a further 40 branded properties across the Gulf, Lebanon and Syria.
Accor has also announced plans to add 200,000 new rooms over the next four years of which half will be in the budget sector. Not to be left behind, the UAE’s Rotana hotel group has launched its own economy brand, Centro. Chief operating officer, Imad Elias says that this is a necessary step because with current options travellers either “have to pay a high rate and stay at full-service four/five star hotel, or pay the ‘economy’ price and stay at a sub-standard hotel.”

While these chains do promise to tailor hotels to the local market and include larger rooms, bathrooms and more cupboard space, one or two unique personality-led offerings may yet challenge the established model.

Stelios Haji-Ioannu of Easy Group has announced that he will be launching a budget hotel concept in the Middle East. He hopes to have six easyHotels operational in Dubai by 2008 and with his low-cost franchise slash the cost of accommodation to less than $60 a night.

YOTEL is by contrast, a low cost but high-concept proposition, inspired by British Airways first class and Japanese capsule rooms. Created by Yo! Everything founder Simon Woodroffe and YOTEL CEO Gerard Greene, YOTEL is poised to take the hospitality industry by storm – and their showcase at this year’s Arabian Travel Market was the first opportunity to see what the big deal is.

Woodroffe claims that this new concept, “has the potential to transform the hotel industry forever,” by offering travellers aspirational luxury at an affordable price. The first YOTELs will open at London Heathrow and London Gatwick in October/November with the potential for expansion to an airport near you. For business-class capsules expect to pay £80 plus for a night, £40 for a standard and £25 for a pre-flight four hour nap and chance to freshen up.

So if Dubai’s market sometimes seems saturated with look-alike chains, the reality is that a variety of standards and cost options are already available. Over the coming months we can expect to hear even more from the high-class minimalists, fractional owners, boutique hotels and executive accommodation providers, as these entrepreneurial ideas merchants create the means to keep us in just about any style that we would like to become accustomed to.

BOXOUT

With so many projects to choose from the following are some of the more distinctive landmark projects that define Dubai’s global ambitions.

The Palm Jumeirah
Nakheel’s flagship development The Palms consist of the world’s three largest man-made islands, each built in the shape of a palm tree. The Palm Jumeirah will be the first of the three to be completed and will add 78.6 kilometres to the Dubai coastline, more than a 100% increase, adding over 4,000 luxury villas and apartments.
The Dubai coastline currently has 20 five star hotels, The Palm Jumeirah will add a further 32 to this number. This will include the recently redesigned Trump International Hotel & Tower. The ultra-modern stainless steel, glass and stone centrepiece will create a new “landmark icon on the Dubai skyline” according to Donald J Trump, Jr. It is also the first UAE property in the portfolio of recently formed Nakheel Hotels & Resorts, which launched in February 2006.

Dubailand
By 2010 Dubailand expects to be an international hub of family tourism attracting 15 million tourists annually. The estimated AED 61 billion Dubailand will include leisure, entertainment, theme parks, eco-tourism, shopping malls, restaurants and residential developments.
Already underway is the Snowdome, a complete indoor ski resort with huge revolving ski slope, artificial mountain range and a deluxe hotel designed to look like an iceberg.
The first phase of the 20 million ft2 Equestrian and Polo Club is now finished as is the groundwork on the massive City of Arabia. On completion in 2008, it will be a complete mini-city and home to The Restless Planet, Mall of Arabia, a five-star hotel and its own monorail system.
Amongst others, Dubailand also includes Sports City, Dubai Lifestyle City and Falcon City of Wonders, home to life-size recreations of the Pyramids, the Hanging Gardens of Babylon, the Eiffel Tower, the Taj Mahal, the Great Wall of China, the Leaning Tower of Pisa and the Light House of Alexandria.

Dubai International Airport
The Expansion of the current Dubai International Airport (DIA) has cost $4.1 billion and includes a new Terminal 3, Concourse 2 and Concourse 3, all dedicated to Emirates, as well as a Cargo Mega Terminal. Construction began in 2002, will finish in 2006 and be operational by early 2007. The new expansion has been specifically designed to house the world’s largest fleet of A380 super-jets that will be based in Dubai by 2012.

Dubai World Central
The six runway Dubai World Central International Airport will be linked to DIA by dedicated high-speed road and rail networks. It will be able to handle a staggering 120 million passengers and 12 million tons of cargo annually, more than any other airport in the world today.
750,000 people will live and work there to create a new city and air transport hub that will effectively transform the region into one of the most powerful global centres for logistics, tourism and commerce.
Strategically positioned next to Jebel Ali Port and Free Zone, DWC will span 140km2, twice the size of Hong Kong Island. Dubai World Central is a multi-phased development that will include an airport, a Residential City, an 850-tower block Commercial City, Dubai Logistics City, Enterprise Park and a world class golf resort.

© Frank Coles 2006.

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