Massive passenger growth through Dubai has triggered a flood of investment into Ras Al Khaimah and the Northern Emirates to cope with the increasing spillover of tourists.
Hilton is one of the international hotel operators targeting growth in the northernmost emirate as it prepares to deliver about 20,000 new rooms across the Middle East and Africa over the next two years - effectively doubling the size of its regional operations.
"Dubai's occupancy does not allow for a lot of people to come and stay on a stopover if they don't have pre-arranged plans, so they will have to go to secondary locations," said Rudi Jagersbacher, the president of Hilton Worldwide, Middle East & Africa.
Hilton plans to add 600 rooms in Ras Al Khaimah this year, more than half of which will be in the new Waldorf Astoria.
Originally slated to open this spring, the 346-room Waldorf Astoria Ras Al Khaimah is now scheduled for a "soft opening" in August. It will be joined by a second Hilton resort in Al Hamra that is scheduled to open in the fourth quarter.
Hotels in the Northern Emirates are reporting rising occupancy levels as Dubai struggles to cope with rapidly rising tourist arrivals and transit passengers breaking their onward journeys in the city. Ramada Hotel & Suites said this week its Ajman property achieved 95 per cent occupancy last year as visitors flooded into the emirate.
Sharjah tourism officials yesterday also revealed a 14 per cent increase in the number of overnight stays to more than 612,000 room nights in the first quarter compared to a year earlier.
While rising hotel occupancy in Dubai diverts more business north, Ras Al Khaimah is also benefiting from rising passenger numbers through its own airport.
About 250,000 tourists visited RAK in this year's first quarter, according to Salem Sultan Al Qasimi, the vice chairman of RAK Airways.
"RAK is eager to tap into the tourism market and expand its wings," he said at the Arabian Travel Market in Dubai yesterday. "We are expanding the airport and because there is great potential for tourism coming to the UAE we want to take part in that growth," he said.
About 40 per cent of visitors come from Germany, with the UK accounting for as much as 35 per cent of traffic to the emirate.
By 2021 RAK expects about 20 per cent of its GDP to be generated by tourism-related activities.
The UAE's hospitality market is forecast to have grown by some 67 per cent in the five years to 2016, generating some US$7.5 billion in receipts.
One of the biggest drivers of that growth will be the rapid expansion of carriers such as Emirates Airline and Etihad Airways, which are routing rising numbers of passengers on long-haul flights through Dubai and Abu Dhabi.
Tourist arrivals are expected to grow by more than 5 per cent every year over the next decade, with the current hotel stock predicted to grow by more than a quarter to about 125,000 by 2016.