Going Up on the Gulf

Over the past five years, a number of Middle Eastern countries -- chiefly those of the Gulf Cooperation Council, or GCC -- have been engaged in an over-the-top building boom that outdoes even hyper-renovating Las Vegas. News of developments in the region top one another in their grandness almost daily: Hilton will open 15 new properties over the next three years; InterContinental Hotels Group has 37 projects in its pipeline; Dubai’s Bawadi development will have 51 hotels for a total of 60,000 rooms... The list is nearly endless and seemingly ever-replenishing.

The countries that make up the GCC are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Saudi Arabia, the council’s de facto leader, occupies the bulk of the Arabian Peninsula, on which these nations sit and under which vast (but finite) reserves of oil and gas are found. These valuable natural resources, and the specter of their eventual exhaustion, are what has both permitted and prompted these countries to make such an audacious push forward in the development of their tourism infrastructure.

Dubai is leading this construction derby, according to John Podaras, operations manager for Dubai-based TRI Hospitality Consulting. The reason for this, Podaras says, is the city-state “realized as far back as the 1970s that there was a need to diversify its economy away from oil.” The other countries of the GCC are following Dubai’s prescient lead.

In the works:
The Hilton
Olympia Kuwait

Coming soon

Following is a look inside the Gulf’s incredibly crowded hotel pipeline.

Hilton Hotels Corp. In addition to the two properties the company already has in Dubai, the 389-room Hilton Dubai Jumeirah Resort and 154-room Hilton Dubai Creek, Hilton will open two more hotels there by the end of 2010. These are the 500-room Conrad Dubai and the 371-room Hilton Dubai Jumeirah Beach Residence, both of which will have meeting space (specifics of which are yet to be determined).

Also by the end of 2010, Hilton will have opened new properties in the emirates of Abu Dhabi and Ras Al Khaimah, as well as in Jordan, Kuwait, Lebanon and Qatar.

Hilton’s broader plan for the region ultimately calls for 60 properties -- and, according to Jean-Paul Herzog, president of Hilton Hotels, Middle East and Africa, “We are constantly having discussions for more hotels.”

InterContinental Hotels Group. The largest lodging company in the world
in terms of number of rooms (more than a half-million, at last tally), IHG is not resting on its building laurels either: The company’s busy InterContinental brand debuted its 150th hotel worldwide last year with the 500-room InterContinental Dubai Festival City, and the 316-room Crowne Plaza Dubai Festival City was poised to open at press time. The two share an events center comprising approximately 40,300 square feet, set between the properties.

In more recent development news, at the end of January, IHG signed an agreement to build the 60-story, 540-room InterContinental Doha West Bay in Qatar (Doha is Qatar’s capital), with an undetermined amount of meeting space. John Bamsey, IHG’s chief operating officer for the Middle East and Africa, believes these openings, along with other projects across IHG’s many brands, “clearly demonstrate our commitment to the Middle EastÉas a key growth market for the foreseeable future.”

Other brands. Many hotel companies are eager for a piece of the Mideast pie. Among properties opening within the next few years:

* Park Plaza Hotels & Resorts’ 167-room Park Plaza Doha, in Qatar;

* A five-star, 282-room Rocco Forte Collection hotel (that company’s first in the region) in Abu Dhabi;

* Dubai Holding member company Tatweer’s 6,500-room, four- and five-star Asia-Asia Hotel & Resort, part of the emirate’s immense $55 billion Bawadi development.

* A 41-room Swiss-Belhotel International beach resort in Sohar, Oman (marking that company’s sixth area opening in just 14 months); and

* The $545 million Salam Beach Resort and Spa, in Manama, Bahrain.

Of MICE and momentum

Can such a boom possibly continue? Hilton Hotels’ Herzog believes so, though with a caveat: “There will be a correction when supply increases, but I’m more interested in increasing the number of available rooms. We are missing out on some business that we could be getting.” Herzog is referring to MICE business, or meetings, incentives, conventions and exhibitions, as the market is known outside of the United States.

“It’s not only Hilton thinking about it,” Herzog says. “It’s everybody. Those who are responsible for promoting tourism are thinking about it, the city governments and tourism councils... What they are doing is bringing attractions to the area, all of which are designed to make these destinations really appeal to both the leisure and MICE markets.”

Besides lots of air conditioning, these attractions include everything from high-end shopping malls to more fanciful diversions such as a 22,500-square-foot indoor ski resort in Dubai. Despite all this, cautions Herzog, “In the MICE business you need to have hotels, and those currently are a bit scarce.”

This scarcity, however, is being corrected rapidly. The impressive scale of the regionally focused Hotel Show 2008, to be held June 8-10 at the Dubai International Exhibition Centre, is demonstrative of this: The Hotel Show expects to host 800 exhibitors spread across 183,000 square feet of space. Attendance at last year’s show topped 10,000 people; this year, organizers expect to welcome at least 10 percent more.

Another major hospitality expo is being held this month in Abu Dhabi -- the Gulf Incentive, Business Travel & Meetings Exhibition, or GIBTM, put together by Reed Travel Exhibitions at the behest of the Abu Dhabi Tourism Authority. Last year, the GIBTM’s inaugural show was attended by 1,168 people from 50 countries. Reed’s group exhibition director, Paul Kennedy, predicts attendance this year will grow by nearly a third.

Despite all these positive indicators -- the staggering number of cranes assembling sleek, futuristic hotels; the dozens of Airbus A380 super-jumbo jets on order by Emirates Airlines; the emergence of regional trade shows -- the future of the hotel and meetings industry in the Middle East remains as difficult to pin down as the shifting sands upon which these new hotels are being built.

“Demand for meetings and incentives from the region is as yet unknown and unmeasured,” Kennedy says, “but what is very clear is that on the supply side, the pace of development in the Middle East is more impressive than even Asia. A number of destinations from the Gulf and the wider Middle East are looking at Dubai and trying to reinvent themselves as meetings destinations.”