DUBAI Citing a saturated hotel marketplace, Kempinski Hotels has announced it will delay completion of a hotel on Dubai’s Palm Jumeirah for at least two years.
The 253-key project will remain an unfinished shell for now, Kempinski’s regional director, Ulrich Eckhardt, tells Bloomberg. “I’m concerned about what I consider poor planning from those in a position to approve new hotels,” he says, adding that Dubai officials failed to adequately examine inventory growth relative to projected demand.
A December study by Deloitte says Dubai visitation would need to increase by about 25% over the next five years to absorb the approximately 30,000 additional guestrooms that are expected to come online. The emirate currently has about 50,000 guestrooms in operation.
There is some good news for Dubai in the near term, however, as occupancy surged 7.9% in January year over year to 76.6%, according to STR Global. RevPAR gained 2.6% during the month to US$178—the highest in the Middle East.
Kempinski plans to open nine properties in the next three years in Abu Dhabi, Bahrain, Saudi Arabia, Oman, Lebanon, Syria and Egypt. The company will open 82 luxury serviced apartments and 10 villas on Palm Jumeirah in June.