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The global hospitality industry is excited about boutique hotels and Dubai's is no exception. A number of smaller, more intimate hotels are opening in the emirate and they're expecting sizeable revenues.
The term boutique hotel is used to typically describe small hotels with upscale accommodation and often aspirational settings, although there are some operators who are carving a niche for themselves by setting up budget properties.
In Dubai, boutique hotels are more upscale than not. A case in point is Manzil Downtown Dubai, which offers four-star Arabian hospitality in a modern, tech heavy setting. It is a part of Vida Hotels and Resorts, a boutique brand that caters to young executives, entrepreneurs and leisure travellers, explains Philippe Zuber, COO of Emaar Hospitality Group, which owns it.
''The addition of Manzil Downtown Dubai to the Vida Hotels and Resorts portfolio reflects our goal of connecting with the new generation of global travellers, especially locals and GCC guests who are discerning in their preferences, seek consistent value and cherish fuss-free hospitality,'' says Zuber.
Early this year, another brand developed by Emaar Hospitality Group — the hospitality and leisure subsidiary of Emaar Properties — and Meraas Holding was announced. Rove Hotels, which claims to feature 21stcentury innovation and sophistication, will draw inspiration from Dubai's heritage. The properties will be rolled out in ten locations in time for World Expo 2020.
''We have made significant progress with our first project, Rove Za'abeel, while five other properties will open in the coming years in Al Wasl, Port Saeed, Al Jafiliya, Oud Metha and Dubai Marina,'' says Zuber.
InterContinental Hotels Group (IHG) has been operating in this segment with IHG Hotel Indigo, which was established in 2004. The group says no two properties are the same anywhere in the world, ensuring guests enjoy a different experience during each stay.
''Independent-style hotel brands are catering to a specific group of consumers who are looking for more from their travel,'' says Pascal Gauvin, COO — India, Middle East and Africa of IHG. ''From our 2014 Travel Trends Report we know travelers are increasingly expecting a more personalized experience. They trust brands with a heritage and value comfort and security, which established [companies] provide.
''However, they don't want cookie-cutter experiences. They choose global brands because of the consideration of local tastes, customs and cultures.''
As guests look for more from their hotel stays, it is proving to be good business to provide more individualized amenities and services. ''In our report we found that nearly three in five guests say their hotel stay is significantly more comfortable if services are personalised, and more than half admit it makes them feel more valued,'' says Gauvin. ''This is what Hotel Indigo is designed to cater to. It reflects the local culture, character and history of the area while delivering the consistencies travellers would expect from a global brand.''
Zuber believes boutique hotels will continue to appeal to the new generation of travellers who are becoming increasingly choosy about experiences. ''This is a rapidly growing market in the region,'' he says.
''To be a leader you have to stay current with the ever-changing trends and offer the best lifestyle experiences. The key is constant innovation and creativity, and by keeping in tune with ongoing developments in our society, boutique hotels will definitely be an integral part of the future of Dubai's hospitality sector.''
Boutique or lifestyle
However, Ali Manzoor, Manager of Development and Consultancy at Knight Frank, believes that boutique hotel brands in the UAE are more similar to lifestyle hotels. ''Although the defining characteristics of a boutique hotel are fairly loose, most would agree that [they] are smaller, trendy properties positioned in the upscale or luxury segment,'' he says. ''Boutique brands have emerged to some degree in this market, but these properties are more representative of the lifestyle rather than boutique concept.
''Lifestyle hotels are similar to boutique hotels in that they are trendy, design-led properties, but as they are often driven by large chains, they are able to offer advantages typically associated with larger brands such as loyalty perks, consistent service and economies of scale.''
While the line is being blurred between boutique and lifestyle options, there is no question about the demand for these properties here. ''With the strong expansion that Dubai has seen in the past decade, developers are increasingly looking to hotel operators for unique lifestyle brands,'' says Manzoor. ''[Some] are already in the pipeline. The Paramount Hotel, two W Hotels, Hard Rock Hotel and ME by Meliá are prime examples of this trend, and such brands can help developers achieve market positioning.
''Another development has been the signing of the Habtoor Grand Beach Resort and Spa to Marriott's Autograph Collection, which is a sign that even regional brands are recognising the need to associate with global operators to increase their [international] exposure.''
Figures from Dubai's Department of Tourism and Commerce Marketing show that hotel establishments welcomed more than 11.6 million guests last year, a 5.6 per cent increase from the previous year. Furthermore, the Dubai Tourism Vision 2020 announced by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, aims to welcome more than 20 million visitors annually from 2020.
The sustained efforts to grow tourism figures will have a direct impact on hotel occupancy rates.
At Manzil Downtown Dubai, Zuber expects solid occupancy of around 84 per cent. And analysts believe there is still room for more keys in the Downtown area, which is becoming a battleground for the boutique hotel segment.
''Downtown Dubai is the world's most visited retail and leisure destination, welcoming more than 75 million visitors in 2013 and over 58 million visitors in the first nine months of last year,'' he says. ''There is strong potential for innovative hospitality experiences in [the area] to meet the needs of visitors.''
Manzoor says the opening of Manzil indicates the importance of having a well maintained and positioned hospitality asset to remain competitive in the emirate. Noting that the Vida Downtown Dubai has seen a substantial jump in occupancy since it was rebranded as a boutique hotel from Qamardeen in 2013, he says, ''With strengthening average daily rates and occupancy levels above 80 per cent in most Downtown properties, there is scope for further hotel development in the area.''
Source: Helga Jensen–Forde, Special to Property Weekly