Emaar hospitality group to ‘slow down’ on hotel expansion plans

Olivier Harnisch

Emaar Hospitality group, that has a strong presence in the Middle East, has 39 projects in the pipeline, which according to its CEO Olivier Harnisch, “is a lot for a company of our size”. However, at a time, when several hotel groups have been expanding in the Middle East, Emaar Hospitality group has other plans.

Talking to Hotelier Middle East at the Arabian Hotel Investment Conference (AHIC) Harnisch said, “We currently operate 18 hotels and residences so we’ve decided to slow down a bit on expansion to focus on the hotels that we are already opening,” said Harnisch

Emaar has five hotels coming up in the next few months in Dubai, in addition to three new hotels in Saudi Arabia in Meccah, Jeddah and King Abdullah Economic City.Did you like this story?Click here for more

He added, “For us excellence is what counts in operations and in delivering financial results for our owners.”

Oversupply in Dubai
Several hoteliers believe that there is an oversupply in Dubai, despite that, hotel groups have been launching new hotels. Talking about that, Harnisch explained, “You can look at it in two ways: where Dubai’s market was years ago and where it is heading to. When we look at the future, it seems like a bleak thing because average rates have come down and RevPAR’s are declining compared to the past. But when we take a look around the world, you will realise that Dubai is still doing better (in terms of annual RevPAR) than most cities like Shanghai, Berlin, Amsterdam and Sydney. So I feel like the city is still in a better position.

“We’ve been blessed with really high growth rates and annual occupancy that was really high, but now the market is maturing and so we need to build hotels are efficiently,” he added.

Describing how hotels should handle the market explained, “We will still need beautiful hotels, but we have to make sure that it is more effective and efficient. We have to make sure that we don’t overspend on BOH and support areas which are oversized. We just need to be very smart about that and should continue to invest in FOH and commercial areas for which the guest pays.”