Hilton Worldwide has announced plans to expand its presence in the Middle East by nearly 80% over the next few years. The company plans to open a Waldorf Astoria (pictured) in 2013, which will be the first in the country, as well as another Hilton resort.
GLOBAL REPORT—Once overshadowed by fellow emirates Dubai and Abu Dhabi, Ras Al-Khaimah is being vaulted into the spotlight thanks to a massive marketing push and a flurry of new hotel investment.
The up-and-coming emirate is the most northern state of the United Arab Emirates and features a landscape of mountains, desert and sea—but little glitz or glamour, until now.
Long seen by local residents as a place to escape for short breaks and staycations, Ras Al-Khaimah is being rebranded as a premium yet affordable luxury destination for leisure and adventure, said Victor Louis, COO of the emirate’s Tourism Development Authority.
And international visitors are taking the bait. Arrivals have increased from 87,000 in 2002 to 835,200 in 2011, according to the TDA. The number of hotel rooms has swelled similarly from 744 in 2002 to 2,651 in 2012.
The TDA has even grander ambitions—and the money to back them up.
“In the coming months, we are working on a series of new tourism projects with a budget of $500 million,” Louis said.
The emirate is tapping into new source markets, looking to expand and develop charter flights direct from key European cities. “This is after the success of the charter flights from Germany, Austria and Sweden that we introduced in 2011, bringing 55,000 more visitors to the emirate,” Louis said.
The TDA's goal is to welcome 1.2 million visitors by 2013 with a hotel room inventory of 10,000 rooms by 2016. While these figures might seem significant, they are a fraction of the 8 million travelers expected to visit Dubai this year and stay in its 60,848 hotel rooms.
Ras Al-Khaimah has 11 resorts and five city hotels at present, including two Banyan Tree resorts, four Hilton properties and a Rotana Resort.
The emirate’s hotels performed well in 2011, showing impressive occupancy growth in all key areas with 8.62% for the Beach Resorts and 1.92% for City Hotels, according to the TDA. Revenue per available room increased as well, rising 24.5% for beach resorts and 10.2% for city hotels.
Dubai reported a RevPAR increase of 20.4% in local currency for October year-over-year comparisons, while RevPAR in Abu Dhabi declined 10.3%, according to STR Global, sister company of HotelNewsNow.com.
Ras Al-Khaimah’s promising outlook has attracted a number of global chains. InterContinental Hotels Group, for one, has two properties scheduled to open in the next few years: a Crowne Plaza resort on the Al Marjan Island and an InterContinental Resort in 2015.
“We expect to see a combination of leisure and business tourism to the resorts,” said Ignace Bauwens, VP operations of the United Arab Emirates, Near East and Africa for the company. “The RAK Tourism Development Authority is positioning the emirate as a global affordable luxury destination for leisure, adventure and business travel, and we feel that our resorts are the right product for the market with a combination of leisure and business facilities.”
Hilton Worldwide also has recently announced plans to expand its presence in the Middle East by nearly 80% over the next few years. The company plans to open a Waldorf Astoria in 2013, which will be the first in the country, as well as another Hilton resort.
A perfect complement
Travel and tourism operators are pitching Ras Al-Khaimah as a perfect complement to its more prominent emirate peers.
Ras Al-Khaimah is seen as a more relaxing destination, which counterbalances the sun, sand and shopping in Dubai or the high-profile events in Abu Dhabi, said Mohab Ghali, country manager at Hilton Worldwide.
“Ras Al-Khaimah offers travelers a quiet sanctuary to unwind,” he said.
Visitors looking for an affordable luxury in a relaxed atmosphere should choose to stay in RAK, said IHG’s Bauwens.
“Ras Al Khaimah has a different tourism proposition from Dubai and Abu Dhabi. The emirate offers a more relaxed pace than the (United Arab Emirates’) two main hubs of commerce, and this is part of its attraction coupled with the affordable luxury positioning.”
Hilton’s properties in Ras Al-Khaimah cater to both the leisure and business segments, Ghali said.
“Ras Al Khaimah is a thriving commercial destination and with the level of investment by the government in its infrastructure and the emergence of more global companies operating in the (United Arab Emirates), we are confident that catering to business and leisure travelers as well as the (meetings, incentives, conferences and events) segments is a successful business model,” he said.
But the opportunities are not endless, analysts warn.
“The market will be able to sustain additional hotels. However, an analysis of the positioning, size and facilities should be taken into account,” said Hala Matar Choufany, managing director of HVS Dubai.
“In contrast to Dubai, (Ras Al Khaimah) relies more on group and leisure visitation that are typically more rate sensitive than the (fully independent traveler) and corporate markets, hence additional high-end and luxury 5-star hotels may not be sustainable in the future, and the development of 4-star and limited-service hotels is recommended.”