Dinar Chat Podcast

Abu Dhabi Hotel Market - 1

Dinar Chat — Mon, 11 Aug 2008 10:55:18 +0000

I am involved with the hotel business in Abu Dhabi in a daily basis where this involvement translated into many things, one is a huge database. i decided to share some of the information which i am sure available elsewhere but why not give a special treat to our Dinar Chat listeners.

also please note that the below and what will be published was taken from older papers i have written before.

— here we go —

1 Abu Dhabi Real Estate Market

The real estate market in Abu Dhabi witnessed a remarkable shift since 2005 due to the aggressive plans defined in “Plan Abu Dhabi 2030” to transform the emirate into a business and leisure hub on an international scale. With an announced supply of ~ 2 million m² office space[1] , ~1 million m² leasable retail space[2], and 38 announced hotels to be developed by 2015[3], Abu Dhabi is to witness a significant market change from today until 2015 when many major developments are expected to be completed. The following sections will give a brief overview of the hotel, office, and retail market.

1.1 Abu Dhabi Hotel Market

Demand for hotel accommodation enjoyed a growth of 16% (guest nights) in 2007 and are expected to increase by another 16% in 2008[4]. Moreover, Abu Dhabi International Airport registered a record year in 2007, with a rise of 31% in total passengers (6.926 million Passengers) and 15% in aircraft movements compared to 2006[5].

Occupancy across the quality hotel market in Abu Dhabi decreased slightly from 79% in 2006 to 78% in 2007[6] due to the fact many hotels were undergoing refurbishment programs, such as the Intercontinental and Sheraton Abu Dhabi Resort and Towers. However, the time series shown in Figure 7 impressively shows the surge in hotel performance in both Average Occupancy Rates (AOC) and Average Room Rates (ARR) since 2005. In particular, the hotels witnessed a significant 27% increase in ARR to AED 869 in 2007 compared to AED 680 in 2006[7].

Source: Hotelbenchmark Survey, Monthly Bulletin January 2007

On the Supply Side, developers, investors, and hotel operators have realized the increasing shortage of room availability in Abu Dhabi and potential business opportunities. There are currently 39 hotels within the Abu Dhabi Island area, 18 of them are within the branded luxury hotels according to the Abu Dhabi Tourism Authority (ADTA) report in the fourth quarter of 2007. In 2007, 38 branded hotel developments were announced and to be opened by 2015. As Figure 8 illustrates, ADTA projects an induced demand that will grow yearly by an average of +12% to top 8,920,600 room supply and 6,244,544 sold rooms in 2015[1]

Due to the significant increase in demand for hotel accommodation in Abu Dhabi, we expect the current undersupply to last for another 2-3 years, indicating further increase in RevPAR as no substantial supply will enter the market until 2010 and 2011.

In general, the hospitality market in Abu Dhabi is just emerging and current undersupplied within all product segments, whether targeting the leisure, business, MICE, budget, mid-market or luxury segments. The market is set to be redefined within the next 5 to 10 years where supply standards, location competition, and demand nature are changing quickly.

1. It is expected the hotel market will diversify in terms of product where new luxury resort hotel operators are to fill an ever growing niche market. The Ritz-Carlton, Angsana Resorts & spa, Banyan Tree, Four Seasons, Jumeirah Luxury Resorts, Hyatt Hotels and Resorts, Oberoi Hotels and Resorts, and Anantara Spa have all signed agreements with developers to manage their properties within the different projects in Abu Dhabi.

2. Business demand targeting mid market hotels seems to be neglected by investors where only 10% of the recently announced hotels will be positioned in the mid market segment.

3. The hotel market is expected to geographically diversify due to the “Plan Abu Dhabi 2030” which launches new hotel destinations such as Saadiyat Island, Reem Island, and Yas Island.

4. Adding new luxury resorts and allocating new beach front properties will attract new demand to the market. Business travelers have been making up to 80% of the current demand in both business and resort hotels. The introduction of the Ferrari Island (Yas Island), Louvre Museum, and Guggenheim Abu Dhabi will attract leisure travelers to the market

[1] Abu Dhabi Tourism Authority, 13/12/2007

[1] Colliers International Report, Q4 2007

[2] Jones Lang LaSalle Report , July 2007

[3] Different news agencies

[4] Abu Dhabi Tourism Authority, 2007

[5] Abu Dhabi Airports Company, January 19^th 2008

[6] Hotelbenchmark Survey, Monthly Bulletin January 2007

[7] Hotelbenchmark Survey, Monthly Bulletin January 2007

Dinar Chat Summer Vacation

Dinar Chat Family — Mon, 14 Jul 2008 16:30:17 +0000

Summer is back and with it comes our annual vacation. We will resume podcasting after the Holy month of Ramadan. We wish all of you happy holidays and god bless……

Money Laundry

Dinar Chat Family — Sat, 07 Jun 2008 04:23:16 +0000

what is the deal with money laundry, you hear about it all over the place since 9/11. is it a new thing? people didn’t do it before 9/11?? or its been there and people were doing it low profile and they just got exposed. Well to know what Money Laundry is, listen to our show this week and let us know what you think.

what do you want from the next parliament … economically

Dinar Chat Family — Sat, 17 May 2008 18:38:42 +0000

we believe it is now the right time to talk about this issue where today was the elections day where people get to say whether they want their county to develop economically or not. we laid 4 different factors for this development, listen to our show this week and let us know what you think.

P.S. this is our first video trial episode … we will try to keep it up and we apologize for the poor sound quality … we will try to improve it for next times.

Elections and Media

Dinar Chat Family — Sat, 05 Apr 2008 19:23:12 +0000

a new regulation was passed recently that prohibits all candidates from displaying their ads on the streets and in the different public areas. that drove candidates into finding news ways to grap the voters’ attention by demanding for new media such as TV and internet. listen to us this week and let us know what you think of our analysis of the current events.

Mortgages

Dinar Chat Family — Sat, 22 Mar 2008 19:22:03 +0000

a modified Mortgages regulation was passed by the parlimant before its resolution recently. the modification had an impact on holding the unreasonable prices incline witnessed in the county. many problems are being raised due to the modified regulation which we are talking about this week, so listen up and let us know what you think.

Cooperative Societies Union in Kuwait is no more!

Dinar Chat Family — Fri, 15 Feb 2008 21:20:12 +0000

Kuwait Government put an end to the ever longing discussion about the hiking consumer prices which is aggravating people’s appetite to salary increase. The question we have asked here this week was, was that the right move to resolve the problem?! how is the government going to proceed without the union where its been with us since 1941! listen to us this week and let us know what you think.

P.S. Dinar Chat article in Al Rai

Happy 1st Anniversary to Dinar Chat

Dinar Chat Family — Mon, 04 Feb 2008 08:41:29 +0000

From all of us in Dinar Chat and the entire Chat Family, we would like to thank you for your support and continuous encouragement that we get from your feedback. This podcast has deep gratitude in its 1st year to our listeners for making it what it is right now and we promise to keep going as long as you keep listening… On a more personal note, I would like to thank Ali for his dedication and hard work to make it happen…. Cheers and God bless KUWAIT

Essential management elements for a sucessful company

Dinar Chat Family — Fri, 25 Jan 2008 22:34:54 +0000

Every business has to have a business plan that makes it successful, success is measured by how you maintain your relationship with your colleagues, your time management skills in achieving the assigned tasks, and finally achieving the needed within the assigned budget. Listen up for this week’s show and let us know what you think.

References:

1- Loans Violations - Al Qabas

2- Manager Tools Podcast

The Kuwait Future Generations Fund

Dinar Chat Family — Sat, 05 Jan 2008 17:33:21 +0000

Today, KIA manages the Kuwait General Reserve Fund, the Kuwait Future Generations Fund, as well as any other moneys committed by the Ministry of Finance.

To put KIA’s size into perspective, the Kuwait Future Generations Fund has 10% of annual oil revenues added to it. As of fiscal year 2004/2005, the annual contribution to the Kuwait Future Generations Fund was valued at 896.24 million.

This week we are talking about the type of investments this fund makes and their strategy in making such investments, so listen up and let us know what you think.

References:

1- HVS international - Kuwait Hospitality market snapshot 2007

2- AlQabas Article on the Kuwait Future Generations Fund