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Dubai hotels are still hot

  • 18-Aug-09 00:00
  • Dubai
  • Hotelier Middle East

Even when the ultra-luxurious Dubai hotels have also experienced a downturn against the global recession crisis, Dubai holidays remain hot as a holiday destination with growing demand from worldwide tourists.

Dubai hotels are still hot

You might have only imagined that hotels in Dubai are for those wanting to holiday in the world's most modern destination. However, these 5 star properties can also provide the shrewd investor with a sound and steady return on his capital.

Many Dubai hotels have been attracting international investors for years. The Jumeirah Palm Resort proved an enormous success, when the construction began on the Palm Jumeirah island (in June 2001) and developers announced handover of the first residential units (in 2006). Since then other fabulous developments have been popular with holidaymakers and investors alike.

However, in common with other hotels around the world, Dubai hotels have also suffered in the global downturn. Until recently an investment in a Dubai hotel could net a return of up to 35% p.a. However, such rates have suffered a pounding recently due to fewer Dubai holidays being sold.

At present there are few investors releasing their property in Dubai, not wishing to take a loss common in all markets recently. A lack of credit, with banks unwilling to lend to all investors, has meant that many who wish to invest in Dubai hotels have been left frustrated.

What is the future for those wishing to invest in Dubai hotels? In the short term, many hotels have had to reduce their prices in order to maintain market share and keep room occupancy rates high. This had seen a 5% increase in the number of guests enjoying a Dubai holiday.

In the longer term, hotels in Dubai are in a good position to weather adverse market conditions due to the underlying soundness of their assets. Dubai hotels have created new standards of luxury and comfort which are becoming the new benchmark that the discerning traveller requires.

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