Opportunities for Dubai’s fit-out contractors are growing in the run-up to Expo 2020
Posted on 5th October 2015
Opportunities for Dubai’s fit-out contractors are growing as owners launch projects to refurbish hotels in the run-up to Expo 2020.
Emaar Properties is understood to be working on refurbishments of three of its Downtown Dubai properties, including The Palace and The Address Downtown Dubai following the recent rebrand of its Qamardeen Hotel to Vida and the refurbishment of Manzil.
Moreover, Jumeirah Group is planning a refurbishment of one of the flagship restaurants at its signature Burj Al Arab hotel and has appointed Dutco Styles and Wood to oversee the project.
Emaar Properties and Jumeirah Group did not respond to requests for comment.
Adam Prowting, the new general manager for Dutco Styles and Wood, said he was prevented by confidentiality agreements from discussing the Burj Al Arab project, but said that “the majority” of the work being carried out by his 130-employee company was in the hospitality sector.
“Hospitality has been the leading sector for the last couple of years,” said Mr Prowting, adding that the bulk of its work has been refurbishing rather than fitting out new hotels.
“And we believe there are a lot more refurbs to come as well.”
Mr Prowting said that internal research carried out by Ducto Styles and Wood has identified 60 major refurbishment prospects due to come on to the market. It is targeting a turnover of Dh150 million next year on the back of such opportunities.
He said that hotels typically have a shelf life of six or seven years before they need to be fitted out again. Given that many of Dubai’s existing hotels were completed in the run-up to the 2008 financial crisis, many are overdue a facelift.
“The recession slowed things down [but] we believe we’re coming out of that and there’s going to be a lot more competition in years to come.
“There’s a need for it. A lot of venues are becoming outdated.”
Research from Arcadis in 2013 estimated that 10,000 of Dubai’s hotel rooms will need an upgrade by 2020.
Tom Gilmartin, the business development manager at Alec Fit Out, which is part of Al Jaber Group, put the cycle for major refurbishment at seven to 10 years, but added that it is now almost 10 years since the market’s peak in terms of new openings.
“Refurbishments will form a very important part of the market coming up to 2020, as many of the older hotel owners will try to upgrade their assets to ensure they can compete against the newer developments,” he said.
He added that owners plan for refurbishments to take place during the summer period when occupancy rates are lower.
“With this in mind, many clients are planning refurbishments now. Ideally, a contractor should be awarded [a contract] by February to enable engineering and procurement to take place before getting on to site.”
Tarek Ardakani, the director of business development for Bond Interiors, said his company was also heavily involved in bidding for projects, but added that the market is “very competitive” and that margins were thin.
Mr Prowting, who has worked in the UAE for nine years, agrees. “It’s the most competitive since I’ve been here. Margins are going down rather than stabilising or going up.”
Khaled Bitar, the general manager of the Jordan-based fit-out contractor Artline, believes that although the UAE hotels market offers lots of business opportunities, the lack of profit means it is not one it is willing to explore.
He was at The Hotel Show in Dubai last week, but was there mainly to meet clients from other parts of the region including Bahrain, Oman and Saudi Arabia, where it has worked on the refit of the Al Faisaliah Hotel, according to thenational.ae news report.
“Competition for contractors here in Dubai is very tough,” he said.
“It’s an expensive country to live in. If my staff were here it would cost me treble what I am paying for them in Jordan. We also would need to be competitive in this market.”Back to all Construction News
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