Jumeirah pauses as the recession bites
DUBAI – The Jumeirah hotel management group is pushing ahead with expansion into China although it will delay the opening of the first of its planned six hotels in the country.
The group had been expected to open the 338-room Jumeirah Han Tang Xintiandi Hotel in Shanghai this year but the economic downturn has stalled the project.
The luxury hotelier, which manages Dubai’s iconic Burj Al Arab, is now expected to open the property in May 2010 in time for the World Expo in Shanghai.
Jumeirah manages 11 hotels including eight in Dubai, plus the Carlton Tower and Lowndes Hotel in London, and Essex House in New York.
It has 14 hotels under construction, including properties in Phuket and the Maldives, and has set a target of 60 hotels under management by 2012.
Jumeirah group executive chairman Gerald Lawless said there had been a 20 percent drop in first quarter 2009 room revenue in its home market, although its Dubai beach hotels were holding up well.
“Our 96.5 percent occupancy rate in April was phenomenal in the current situation,†he said.
Lawless said that expectations had to be adapted in a recession scenario and it was inevitable that average rates would drop.
“We are in the luxury segment where we are not expected to discount, but we have to be flexible, offer best available rates and work with Internet sites such as Expedia.â€
He said only the Burj Al Arab would be quarantined from discounting.
Overall, Dubai’s RevPAR dropped from US$318 in the first quarter 2008 to US$203 in the first quarter this year due to an increase in the number of hotel rooms and a drop in room rates to boost occupancy levels, according to STR Global.
Ian Jarrett
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