x Abu Dhabi, UAEThursday 18 January 2018

Sharia principles cushion hotel from downturn

A hotel that follows Islamic principles has been insulated from the economic downturn because of its Sharia niche, it says.

A hotel that follows Islamic principles has been insulated from the economic downturn because of its Sharia niche, it said on Thursday. As a Sharia-compliant hotel, the five-star, all-suite Tamani Hotel in Dubai Marina does not serve alcohol, the food is halal and there is a floor exclusively for women that only female members of staff are allowed to enter.

The female staff are dressed in a particularly conservative way, in keeping with Islamic tradition. The hotel's hallways are decorated with Islamic art and artefacts. "We are enjoying very healthy occupancy to the level that we don't feel that we have been affected by what's going on around the world," said Muin Serhan, the general manager of the Tamani Hotel, which has 240 suites. For the Eid holiday period, the hotel was nearly full, with a 95 per cent occupancy rate, Mr Serhan said. He expected occupancy rates to be about 66 per cent this month, despite the slow Ramadan period. Last month, the hotel had occupancy rates of 71 per cent. Dubai hotels overall saw occupancy levels fall to 64.1 per cent last month from 75.5 per cent in the same month last year, figures released on Thursday by STR Global showed.

Average room rates in the emirate were down to US$156.73 (Dh575.67) from $200.55 in the same month last year. As a result, revenue per available room, an important industry indicator, fell to $100.46 from $151.37. "With Ramadan taking place from August 21 to September 19, the Middle East-Africa region dropped 21 per cent in RevPAR for August, falling for the first time behind Europe and the Americas in terms of monthly RevPAR declines," said Elizabeth Randall, the managing director of STR Global. "We expect this to be a temporary position. For the year-to-date the region still showed the least declines of all four regions."

Tamani, where a two-bedroom suite costs Dh1,000, is the first branded UAE Islamic hotel operator promoting Islamic values, according to the Dubai Department of Tourism and Commerce Marketing (DTCM). The Tamani hotel also employs eco-friendly practices, including installing energy-saving lightbulbs and recycling water. "This is a market niche and hotels in such niches tend to do better than standard hotels," Khalid bin Sulayem, the director general of the DTCM, said at Tamani's launch in February last year.

Mr Serhan said the hotel was just as profitable as its non-Islamic competitors, even though it had no revenues from alcohol sales. Analysts said such hotels often attracted large families from the region, who tended to spend more money and stay for a longer period of time. "The performance of Tamani is above the benchmark," said Arnaud Andrieu, the vice president at CB Richard Ellis Hotels Middle East. Such hotels offered a "strong Arabian cultural experience", he said.

Mr Andrieu said interest in launching Sharia-compliant hotels was sparked by the success of Sharia-compliant banking. The Abu Dhabi-based hotel company Rotana, which runs some 36 hotels in the Middle East, recently created a Sharia-compliant brand called Rayhann Hotels and Resorts. Tamani Hotel and Resorts plans to operate another three hotels in Business Bay in Dubai within the next few years. "On the investment side, Sharia-compliant hotels provide Sharia-driven investors with investment opportunities in Sharia-compliant hospitality assets, widening the range of Sharia compliant investment products," said Chiheb ben Mahmoud at Jones Lang LaSalle Hotels.

He said it was important to differentiate Sharia-compliant hotels from "dry" hotels, which simply do not serve alcohol. Analysts said the main issue facing Sharia-compliant hotels was the lack of an independent board to certify properties as Sharia-compliant, so that they were basically self-designated. rbundhun@thenational.ae