Hotels developed in and around the region’s shopping malls
can expect to post an Average Daily Rate (ADR) 25% higher than hotels that are
not co-located with a major retail development.
The findings are published in a report by Colliers International, released ahead
of Arabian Travel Market 2017, which
takes place 24 – 27 April at Dubai World
As part of its experiential travel series, Colliers concluded
that hotels such as those clustered around Dubai’s
Mall of The Emirates and The Dubai
Mall, enjoy stronger business performance overall – not only beating
seasonal fluctuations in tourist arrivals, but contributing in the drive to
attract more tourists over the traditionally quiet summer season.
Simon Press, Senior Exhibition Director, Arabian
Travel Market, said: “In the UAE, the idea of a combined retail, leisure and
entertainment destination has really taken off. We have hotels attached to
malls and, as such, these are much sought after properties. There is massive
demand for urban tourism from Indian, Arab and Chinese visitors.
“Since the opening of Mall of the Emirates in 2006, the
number of hotels and serviced apartments in the area has risen from four to 58
in 2017, totaling 8,654 keys. While only two of these hotels are physically
part of the mall building, the remaining 56 have also demonstrated strength
across all performance metrics.”
For retail tourists, shopping malls and the facilities they
feature – from indoor ski slopes to aquariums – form an integral part of trips
to the UAE. Hotels capitalize on this by offering promotional packages and free
transportation, as well as cross marketing discounts and free vouchers with
“The theme behind Arabian Travel Market 2017 is experiential
travel and that brings with it a desire for bigger and more compelling
experiences. The retail landscape of the GCC and UAE in particular, certainly
performs in line with this,” added Press.
It is noticeable the number of shopping malls/entertainment
centres now exhibiting at ATM. This year we have 401, including: Al Shaab Village, Sharjah; Chic Outlet Shopping;
Fashion Arena Prague Outlet; Freeport Lisboa Fashion Outlet; Istanbul Shopping
Fest; La Roca Village in Barcelona and Las Rozas Village in Madrid; and Westfield Europe Ltd.
The UAE has the strongest retail tourism sector in the region
and Dubai takes the lead among the seven emirates – with retail accounting for
more than 40% of total tourism spending.
According to Press, Dubai’s strength has been underlined over
recent years with the introduction of retail events throughout the year,
including Dubai Shopping Festival and Dubai Summer Surprises.
He said: “Not only are we seeing more mega-retail
developments with onsite hospitality facilities, but we are seeing more and
more packed into these malls, adding to the excitement in this sector. The
regional retail industry is incredibly innovative. The evolution of shopping
malls into leisure and entertainment destinations in their own right has
brought huge value to the tourism industry and, as a result, local hotels too.”
While Dubai and Abu Dhabi have more than 626,887 sq. m. of
retail space currently under development, other major GCC cities are also
looking to replicate the success with Muscat, Riyadh and Doha all currently
engaged in similar retail projects.
In Oman, Muscat’s seasonal tourism industry will receive a
boost from the development of Palm Mall, which will span 157,000 sq. m. upon
completion later this year. In line with the trends identified by Colliers, the
mall will feature the Oman Aquarium, an indoor snow park, cinemas, food courts,
an amphitheatre and a hypermarket.
Muscat’s second major retail development, Al Araimi Boulevard
Mall, which covers 128,000sqm will feature a dedicated kids’ zone, hypermarket,
fashion brands and F&B outlets.
In the capital of Saudi Arabia, where mega-malls have already
become commonplace on the fast-changing skyline, two mega-projects planned in
Riyadh over the coming years. The first, to be completed in 2018, will be Mall
of Arabia, with a Gross Leasable Area (GLA) of 167,000sqm and highlights
including landscaped gardens, water features, retail stores and a co-located
This will be joined by the first phase of Mall of Saudi in
2022, with GLA of 300,000sqm, comprising shops, restaurants, entertainment
areas, offices, a hotel and indoor ski facilities similar to those seen in the
Qatar’s retail landscape is also taking shape following the
launch of the 500,000sqm Mall of Qatar in 2016, while this year will see the
opening of Doha Festival City which will
be home to four theme parks and entertainment concepts, plus 500 stores and a luxury
Press said: “Whether it is in the number or size of malls, or
through the introduction of big name F&B outlets, cinemas and other
attractions, we now see more UAE and GCC cities following in Dubai’s footsteps.
This will mean that hotel operators need to keep a close watch on planned
retail developments in order to secure the best locations and capture a wider