These Dubai Projects Were Left For Dead – Now They’re Back
13.08.2024 - 22:12
/ skift.com
/ Josh Corder
/ Indigo Airlines
For almost two decades, Dubai’s beachfront was something of a graveyard. Towards Abu Dhabi, you had the partially finished Palm Jebel Ali, which had been announced in 2002. Closer to the marina area, there was the struggling “The World” Islands, which dated to 2003. And towards Sharjah, Deira Islands (the 2004 project now known as Dubai Islands), seemed abandoned.
All three were victims of the 2008 financial meltdown.
Now the UAE has revived plans for them. Growth in Dubai’s hotel openings has been slow in recent years and the aim is to attract interest from developers to build these out as more millionaires flock to the city and tourism goals keep ratcheting up.
“If Dubai is going to be able to satisfy a [new] tourist flow, it’s going to be about beachfront hotels. And Palm Jebel Ali and Dubai Islands have got that,” said Knight Frank partner and regional hospitality head Daniel Pugh.
Palm Jebel Ali was revived in 2023 and hopes for 80 hotels upon completion. Dubai Islands was resurrected in 2022, and also plans 80 hotels.
If they hit these goals, they would add some 20% to Dubai’s supply, currently at 820. For now, though, only two hotels on Dubai Islands have opened, and there are no confirmed hotels for Palm Jebel Ali yet.
“It’s likely that a lot of [openings] will be in the five years. Maybe in the next two years or 18 months, we will start to see more concrete plans for when that supply is actually going live,” said Pugh.
The World hasn’t seen as much developer interest, but it has been slowly opening hotels since last year.
With more than 151,000 hotel rooms, Dubai has more keys than Las Vegas. But growth has slowed. Investment management company Colliers told Skift that over the next three to five years, growth is projected to be 2% to 5%, as opposed to 7.7% between 2016 and 2022.
According to industry tracking firm STR, Dubai will open 18 hotels and 6,000 hotel rooms this year, just over a 2% increase in supply. Next year will see another 17 hotels and 4,000 rooms on top of that.
Many luxury developers are waiting for Dubai’s revived man-made islands to be completed so they can continue to build lucrative beachfront hotels.
Colliers’ Nicolas Nasra, Head of Hotel Advisory, Hospitality & Tourism explained: “The lack of prime beachfront space is one contributing factor [to the slowdown in development]. Prime beachfront plots have become increasingly scarce for new luxury developments, and operators highly coveted these locations due to the premium guests are willing to pay for them. These two master plans [Dubai Islands and Palm Jebel Ali] will create new high-quality leisure destinations that appeal to luxury (and other) hospitality developments.”
Knight Frank’s Pugh said: “It may be some