News Analysis: UAE's next big hospitality hotspot

News Analysis: UAE's next big hospitality hotspot
Sharjah is reported to have enjoyed a 70% occupancy rate from January to June of 2017, with its airline, Air Arabia, also reporting an increase in net profit.
Published: 31 January 2018 - 6:21 a.m.
By: Sarakshi Rai

Sharjah’s tourism industry is currently experiencing a boom. In the first half of this year, according to the Sharjah Commerce and Tourism Development Authority, local hospitality sector revenues were up 7.8% when compared to the previous year, as the emirate pushes towards its target of 10 million annual visitors by 2021.

Ahmed AlKhoshaibi, the chief executive officer of ARADA — which recently announced a new deal with Minor hotels to bring the Anantara brand to Sharjah — commented that tourism in this emirate is being driven by several factors, including increased government spending, new hotels that are being developed by the Sharjah Investment and Development Authority (Shurooq) around the emirate, and the steady capacity growth of Sharjah International Airport, aided by the new routes that Air Arabia is currently rolling out.

For example, the emirate is planning to open a luxury lodge near Mleiha, where fossils of marine animals from millions of years ago can be found. The Fossil Rock Lodge — which is set to open in the first quarter of 2018 – will offer accommodation to intrepid explorers wanting to make the most of the UAE’s natural environment. It is one of a number of recent leisure offerings from Shurooq. In September, Shurooq reported that its upcoming projects were almost complete with Al Bait Hotel 70% developed and Fossil Rock Lodge 60% complete — these projects, collectively known as the Sharjah Collection, are all set to be managed by the Mantis Collection.

The first phase of the Sharjah Collection portfolio of projects comprises four key developments: Kingfisher Lodge in Kalba as part of the Kalba Eco-tourism project; Al Badayer Oasis at Al Badayer desert; Bait Khalid bin Ibrahim in Heart of Sharjah; and the Fossil Rock Lodge at the Mleiha Archaeological and Eco-tourism project.

In an interview with Hotelier Middle East, AlKhoshaibi added that “we believe that Sharjah is entering one of the most exciting phases in its lengthy history, and new developments such as the Anantara Resort Sharjah and others reflect that”.

“While Sharjah has a mature hospitality market, there are relatively few five-star hotels in the emirate, in comparison to other nearby markets, and we think that this hotel will set a new standard for hospitality in the city,” he added.

In September 2017, UAE-based Tilal Properties and Hilton unveiled a new hospitality property in Sharjah, the DoubleTree by Hilton Sharjah Tilal Mall. As part of the venture, a new DoubleTree by Hilton property will open in Tilal Mall in Sharjah in 2021, with the hotel offering 200 guest rooms to visitors in the UAE. The new hotel will adjoin Tilal Mall, which is set to become Sharjah’s largest shopping complex when it opens before the end of 2020.

At the signing ceremony for the Doubletree by Hilton, Carlos Khneisser, Hilton vice-president for development in the Middle East, North Africa and Turkey, said that “initiatives such as Sharjah’s Tourism Vision 2021, which aims to attract more than 10 million tourists by 2021, are drawing even more visitors to Sharjah”.

The AED1.5 billion ($0.41bn) Tilal Mall will feature a range of retail selections, including a variety of high-end brands, a multi-screen cinema, family entertainment centres, a selection of culinary outlets, a 65-hectare recreational park, a hypermarket, a medical clinic, and a pharmacy.

Khneisser also believes that the emirate’s reputation as a centre for Emirati culture, and the city’s importance to the economy of the UAE, make Sharjah a prosperous market for hospitality projects. His sentiments were echoed by AlKhoshaibi, who believes that Sharjah is entering one of the most exciting phases in its lengthy history, which is reflected by new developments in its hospitality and leisure offerings.

But his project, the Anantara Resort Sharjah, is only part of the puzzle. Other developments, such as the 3.3km beach renovation project taking place in the area where the hotel will be built, will also help attract tourists to the area. Aljada, a multi-faceted mixed-use destination that ARADA launched in September, contains a significant leisure and entertainment precinct, the Central Hub, which is designed to attract visitors from the rest of the UAE and beyond.

Elsewhere, giant new malls also show that Sharjah is fully developing its potential as a prime destination. Together, alongside Sharjah’s existing cultural assets and considerable natural beauty, these initiatives will certainly see increased interest in Sharjah, with something to offer for every tourist.

Sharjah-based airline Air Arabia is also on the up and up, and the airline reported a 27% increase in Q3 net profit, based on cost savings and new routes added.

The airline announced third-quarter net profit of $102 million (AED376m), compared to $81m (AED 297m) reported the same period last year. According to the Sharjah Commerce and Tourism Development Authority (SCTDA), Sharjah’s hotels enjoyed a 70% occupancy rate from January to June this year and registered a total of 885,000 hotel guests during the period. China, India, Oman, Russia and Saudi Arabia were the biggest inbound tourism markets for Sharjah during the first half of 2017.

For industry insiders, Sharjah’s new hospitality push doesn’t come as a surprise, and forms part of the ambitious Sharjah Tourism’s Vision 2021, which aims to attract more than 10 million tourists to the emirate by 2021. Historically, Sharjah has primarily welcomed cultural tourists, who are attracted to the emirate’s many museums, historical sites, and places of natural beauty.

AlKhoshaibi believes that there is definitely room for further supply of luxury properties in the emirate, bearing in mind the tourism push. “We think there’s plenty of room for further properties of this type in the Sharjah marketplace,” AlKhoshaibi added.

ARADA’s partner, Basma Group, is in the process of developing the Novotel Sharjah Expo, a 200-room hotel that will be operated by AccorHotels when it is completed next year. In addition, ARADA will also be opening four hotels in Aljada, a mixture of luxury and mid-range properties, along with serviced apartments.

“We are already in discussions with extremely prominent operators, and we expect to announce more details about these hotels in the first quarter of 2018,” AlKhoshaibi noted.

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