UAE luxury hospitality builds momentum
9 May 2023
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Jumeirah Group enjoyed a year of strong growth in 2022, with both improving financial results and several new property launches.
So far in 2023, it is also on track to hit its growth targets, thanks to ongoing demand for luxury hospitality, despite a slight softening overall in the Dubai market.
“We’re on track with our broad financials for 2023,” says CEO Katerina Giannouka (pictured right).
“We have seen a softening in average rate [in line with the market], but while the market lost in RevPAR, we improved our position vis-a-vis our competitors, so our revenue generation index that manages relative performance is up, and we’ve actually gained market share over the first quarter of the year.”
According to Giannouka, 2022 was “an exceptional year” for both Dubai and Jumeirah Group for several reasons. An important factor was Dubai's pandemic response. The emirate was one of two markets worldwide, alongside the Maldives, that reopened to international travel post-Covid in a “relatively eased way”, she says.
However, while the Maldives restarted tourism out of necessity due to its complete dependence on the sector, Dubai’s reopening was strategic and “really set a standard” in how to resume business post-pandemic. This was of considerable benefit to Jumeirah Group, which, notes Giannouka, saw a continuation of growth in luxury consumption throughout the pandemic.
“In combination with that, a lot of additional travellers came here, and then, post-Covid, people’s propensity to spend on travel post-Covid really increased,” she adds. “It also came with good financial discipline – so all of these factors helped Jumeirah to have a very strong year in 2022.”
International expansion
Globally, the luxury hotel market is set to grow to $238.5bn by 2028, rising at a compound annual growth rate of 10.4 per year from a value of $93.43bn in 2020, according to Fortune Business Insights.
Jumeirah Group has also been physically expanding apace. In the past 18 months, the group has opened hotels in the Maldives; in Capri, Italy; and in Bahrain. In February 2023, it acquired Le Richemond, a historic hotel property in Geneva, Switzerland.
Jumeirah Group's acquisition of its first property in Switzerland, Le Richemond on the banks of Lake Geneva, forms part of its strategy to build its brand profile in gateway destinations across the world
Looking ahead, it plans to continue to expand its brand internationally. “Now we’ll also be looking at resort destinations, [with the] focus initially on Europe, and then we will look to diversify into the US and also into Asia, continuing with both city hotels and resort destinations,” Giannouka explains.
The group will open the Marsa al-Arab hotel in Dubai in the next 12 months. Giannouka touts the property – with its 386 rooms, 10 food and beverage venues, and location adjacent to an 82-berth super yacht marina – as a “keenly awaited” destination for the group that “will truly be our new expression of hospitality here in Dubai”.
All eyes ahead
The group’s immediate targets for 2023 are for further growth on top of 2022’s performance. As an incoming CEO, Giannouka admits this is “always a challenge, but I’m glad to report that in the first quarter, we’re on track for another year of growth.”
Jumeirah Group’s 2023 performance will be supported by opening its first hotel in Saudi Arabia, the Jumeriah Jebel Omar in Mecca, in the next six months – a key location that should benefit from both the country’s rising pilgrim numbers and broader tourism market growth. This will be followed in 2024 by the launch of the 180-room Jumeirah The Red Sea.
“Beyond that,” she expands, “we are putting together a growth strategy as part of a five-year plan, and that will include Saudi Arabia. With a market that’s looking to attract 100 million travellers, there’s space for Jumeirah and the Jumeirah brand is very well recognised, even though we don’t have any hotels there today. It’s a natural place for us to have properties [and we expect that we] will perform well there.”
In the next five years, the group plans to expand from 150 to 200 properties by adding 10-12 properties a year, whether new builds or conversions of existing properties.
Additionally, it aims to reduce its carbon footprint by 25 per cent by 2025, building on existing schemes that have used artificial intelligence and behavioural science to tackle food waste and emissions.
As Giannouka adds: “We take our environmental responsibilities very seriously, and we are committed to making a positive impact on the planet.”
Main image: The five-star Jumeirah Marsa al-Arab is part of a broader development led by Dubai Holding that will include a superyacht marina, a series of ocean-facing, six-bedroom villas and a boardwalk
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