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While the region's retail sector has become increasingly synonymous with designer labels from all over the world, the hospitality and real estate sectors are now catching on fast. There is nothing quite like the lure of luxury and developers are discovering that associating an eminent brand with realty projects can be a winning formula.
''Dubai is seen as trendy and dynamic, which is why designer hotels are now in line,'' says Chiheb Ben Mahmoud, Executive Vice-President and Head of Hotels and Hospitality Group - Middle East and Africa at JLL. ''Like other hotels in the five-star segment, designer hotels have identified Dubai as an important market as the city strengthens its role as a business and leisure hub.
''But these fashion branded hotels will only work as solid propositions, not as gimmicks.''
For a designer-branded hotel that recently celebrated its fourth anniversary, the strategy has been hugely successful. The Armani Hotel is the flagship property of Armani Hotels and Resorts and is regarded as a trailblazer in branded hospitality in the region.
''Before the launch of Emaar's Armani Hotel in the Burj Khalifa in 2010, Dubai's lodging offering primarily comprised of branded full service, select-service and unbranded independent hotels,'' says Harmen DeJong, Partner - Development Consultancy and Research at Knight Frank. ''The segmentation of the lodging market was driven by demographics, including age, disposable income and ethnicity. Driven by the popularity of boutique and lifestyle hotels elsewhere, operators in Dubai realised that there was a potential gap in the market, whereby operators predominantly market their property based on guests' psychographics [e.g. interests, opinions, values, etc],'' he says.
''As such, designer hotels have provided tourists with more lodging options and, therefore, created a more competitive market.''
The market is now expected to become even more competitive as more luxury branded properties will be opening in Dubai in the next few years.
Bulgari, in conjunction with real estate development company Meraas Holding, is another coveted brand that is venturing into real estate and hospitality. The Bulgari Hotel on Jumeirah Bay Island, located off Jumeirah Beach Road, will be the world's fifth Bulgari Hotel and Resorts property. It will comprise 100 rooms and suites, along with 20 hotel villas spread over 17 million sq ft.
Designed by Italian architectural firm Antonio Citterio Patricia Viel and Partners, the development will feature a marina and will have a mix of traditional and modem themes. It will be sculpted into the shape of a titanic seahorse.
''We are delighted to launch this visionary project that will convey Bulgari's core values of contemporary design, magnificent craftsmanship and artistic detail,'' says Jean-Christophe Babin, CEO of Bulgari Group. ''This project is for us part of a larger plan to forge a stronger presence in the GCC.''
Lamborghini is another brand that is leveraging its strong presence in the region to expand into the hospitality sector. A Lamborghini hotel in Dubai is reportedly in the discussion phase at the moment. There has also been talk of hotel projects under brands such as Cavalli and Baccarat, although no formal announcements have been made.
Meanwhile, Versace is well under way with its Palazzo Versace project in the Culture Village district. The project is expected to open by the end of next year.
Versace set the trend with the world's first fashion-branded hotel when its renowned Gold Coast hotel opened in 2000 in Australia. The Dubai property will be no less extravagant, comprising 215 luxurious hotel rooms and 169 one-to six bedroom condominiums.
The mixed-use development is expected to ooze Versace's trademark designs, including hand-detailed ceilings in gold and the finest marble and mosaics.
Around 95 per cent of the Palazzo Versace condominiums have been sold and those who bought into the project can use the adjoining hotel facilities.
Prices of the residences started at Dh2.5 million when they were launched and buyers have the option to choose condominiums that are fully furnished and personalised by Versace.
The project is being developed by Enshaa.
Good for Dubai
A similarly luxurious atmosphere is being encapsulated at Damac Properties' Damac Residenze, which will feature interiors designed by Fendi Casa. Situated in Dubai Marina, Damac Residenze comprises 200 apartments housed on the 43rd and 84th floors of Damac Heights. It is the first Fendi-styled residential apartment designed by Fendi Casa in Dubai.
Work is underway for the project, which comes with facilities such as a swimming pool, steam room, sauna and Jacuzzi. It is expected to be completed in the second quarter of 2016.
Experts believe the growing interest of luxury brands in real estate and hospitality can only be good news for Dubai. Glasford Daley, Operations Director of Splyce Interior Design, says Dubai needs these types of projects.
''They help with tourism and the image of a place that is fast becoming the country people look to for design cues,'' he says.
However, while the high standards required by such top brands will serve as a catalyst for further improvement, there could be obstacles along the way.
''Well-established retail brands are one of the biggest challenges a designer can face,'' says Jason Lew is, Founder and Managing Director of Limah Design Consultants. ''These brands are so ingrained into the public mind, with defined values, positions and styles, that designing new components to the brand takes great consideration.
''Although rewarding, it is only possible through careful research and design exploration to uncover the brand essence and then communicate that in new forms, whether it be interiors, architecture or product design.''
While challenges are inevitable in such monumental developments, will these projects ultimately pay off in the long run?
''Designer-branded hotels are aligned with the perceived attributes of Dubai as a destination,'' says Mahmoud. ''In the Middle East, in general, as well as in Dubai, hotels have been tightly linked with the rest of the social and business community and play a larger role than the usual functions of hotels.
''Therefore, the success of designer-branded hotels hinges on the extent to which they can position themselves in the social context in which they operate, as well as on the systems and service infrastructure.''
However, while these hotels will attract throngs of visitors, Knight Frank's De Jong doesn't feel it will be a major driving force in the industry's overall growth.
''Designer hotels generally market their property to the higher end of the market, which is already catered for sufficiently in Dubai,'' he says. ''As such, these hotels are more likely to facilitate growth rather than drive it.''
While there are many new hotels opening, Mahmoud says branded hotels remain a very limited group within the hospitality sector. Therefore, he says there is no need to worry about an oversupply of branded property.
Meanwhile, the hotel industry in general continues to flourish and branded offerings are expected to remain a vital segment in the hospitality market.
''Dubai has one of the highest concentrations of five star hotels of any major city in the world and one of the highest occupancy rates for hotel rooms,'' says Mahmoud.
Read more on why Designer hotels eye Dubai market
Source: Helga Jensen-Forde, Special to Property Weekly