Dubai can handle additional hotels even though more are about to open soon and demand has declined, the chief executive of Hilton Worldwide says. The hotel operator is expanding aggressively throughout the Gulf, with at least another 3,264 rooms planned in the next three years. Hilton yesterday opened its second hotel in Ras al Khaimah and launched its first Hilton Garden Inn hotel in the region in Riyadh. Christopher J Nassetta, the chief executive and president of Hilton Worldwide, said that with two established hotels in Dubai and another two under development, Hilton was still considering other opportunities.
"There's no question that demand has been impacted in Dubai and other parts of the Middle East, as well as around the world, when you look at the financial crisis that has occurred and the slowdown in global growth," Mr Nassetta said. "But, also recognise that we're in this for the long term. We've been around 90 years and we intend to be around a long time. We're thinking about fundamentally sound locations in sound, long-term markets. When I think about Dubai, I'm thinking about Dubai in the context of the next 10 or 20 years, not the next two or three years."
Dubai's revenue per available room, a key indicator for the industry, is expected to fall by up to 28 per cent this year compared with last year because of an increase in the number of rooms coupled with a drop in demand, according to STR Global. But Hilton still sees potential, especially for introducing its mid-scale Garden Inn brand to the emirate. Much of the development in Dubai has focused on high-end luxury hotels, creating an opportunity for Hilton, Mr Nassetta said.
"If you look at the world, there's no question that the global financial crisis has slowed things down in terms of deliveries, but our pipeline is still as good as it has ever been in our history, with nearly 1,000 hotels," he said. "We'll ironically have our best year ever in terms of new hotel deliveries in the world. We'll have approximately 330 hotels delivered, and most of these hotels were under construction even before the global economic crisis hit."
The opening date of Hilton's Conrad Dubai has been pushed back from 2010 to the last quarter of 2011, according to the company's latest summary. Ras al Khaimah, which will host the America's Cup next year, has been a major focus for Hilton. As well as the existing two hotels, another two are under development and the company's Doubletree Suites will open in the first quarter of next year. "Relative to our other global competitors, we're really the only name in town there," Mr Nassetta said.
"Our view of that market is that it's a strong market now, and it's only getting stronger. It's been a real up-and-coming resort location. We think as the economies of the Middle East thrive, it's going to thrive, too." Mr Nassetta said the Middle East was a particularly important part of Hilton's growth plans. "Our belief is that it is going to grow at a more rapid pace than many other regions of the world."
The company, which has about 3,400 hotels in 78 countries, is expected to announce a new hotel in Egypt this week. Mr Nassetta said he could not comment on a legal dispute with Starwood Hotels over claims that Hilton copied ideas for its new Denizen brand from the template for Starwood's W brand. Hilton had been looking at bringing the Denizen brand to Dubai and Abu Dhabi. email@example.com