Dubai is is among the 25 most profitable destinations for hotel investment in 2012. The list was put up together by an international panel of experts.
A report by commercial real estate service firm Cushman & Wakefield, called “Winning in Growth Cities 2012-13”, ranks Dubai as the 16th best hotel destination. In addition, the investment in the sector tops Dh14.2 billion ($3.9 billion) between the third quarter of 2011 and the second quarter of 2012.
Dubai is the only Middle Eastern city which managed to enter C&W’s list of top investment destinations.
Not long ago, STR Global stated that the level of supply of new hotel rooms is likely to grow to 9.6% this year. In addition, compared to 2011, demand in the hotel sector increased by 16.5% in the period between January and August. About 13,000 hotel rooms are in the process of building in Dubai. Moreover, 21,000 more are expected to be announced in the near future.
The number of visitors in Dubai from all over the globe continues to rise. In 2011 it reached more than 8 million people. Also, STR Global predicts that this year hotels’ revenue for available room will increase from 8% to 9%.
Furthermore, tourists in Dubai will spend more money in the city this year. International visitors are expected to spend 24% more. Compared to rates from previous years, the figure has increased with over $1.5 billion.
Cushman & Wakefield’s report placed London on a higher spot this year in the hotel investment destinations list. The UK’s capital now challenge Ney York’s position. Experts attribute that to the Olympics which were held in London.
Overall, the global investment rate in the hotel industry dropped with 12.4% for only one year. That is due to the fact that the downtrend in the economy has prolonged deal closing times and the economic activity.
People with high net worth, equity investors and state-owned wealth funds (SWF) will continue to have a key role in the industry.
Connectivity Center
Dubai also takes the 15th spot on the list of the cities with best connectivity.
According to analysts, a city’s connection with the world, no matter whether it is by sea, air or ground, is one of the things that makes a place global. If a city has a good connectivity, it will also have better prospect for business and leisure activities.
Other Cities in the Ranking
The list is topped by Tokyo (1) and Hong Kong (2). This year New York is third and London – forth.
In general, the 25 cities included in the ranking have improved their share on the market with 3%, reaching a total of 56%. In addition, the investment market in New York increased with 18%. The city is still the best place for multi-family investment. Los Angeles was announced as the most preferred industrial investment city. Also, in Hong Kong investments largely go to the retail industry.
Researchers who worked in the report stated that the prosperous cities on the list are greatly exceeding other places in the world in terms of many factors. Some of them are, for example, urbanization, human capital, technology, growing middle class, industry clustering, as well as history and culture.
