Mid-scale and economy category properties are taking over Dubai’s hotel market with almost 50 per cent of the 3,600 new hotel rooms entering the emirate’s market by year-end having a three-star or lower rating, said a report.

With only 44 per cent of Dubai’s 65,000 hotel rooms rated as five-star in the first quarter of the year, the near-saturated luxury market will see a surge in supply of lower-graded properties with more competitive room rates, revealed a report by Jones Lang LaSalle (JLL), a leading real estate investment and advisory firm, exclusively for The Hotel Show Dubai 2015.

Around 44 per cent of the budget-friendly hotels are forecast to be graded three-star or less and a total 69 per cent at four-star or less.

Dubai-based Hospitality Management Holdings (HMH) has identified the opportunity to yield high results in this segment with the introduction of the ECOS Hotels in 2016 - a 'no frills' B&B brand tying together a unique economical and green concept.

Laurent A. Voivenel, CEO of HMH, said: "Dubai might be considered one of the most luxurious cities in the world, but hoteliers entering the market need to continue this trend and accelerate the development of budget room options to cater to demand from the growing middle classes, shorter-stay passengers travelling through Dubai International Airport, and attract new travellers from the emerging economies of Africa and Asia. This is a smart choice for investors due to lower construction and operating costs and quick and high return on investment."

Moreover, the hospitality and leisure division of Dubai developer Nakheel plans to deliver a number of hotels in Dubai over the next three to five years.

Located at various locations across the emirate, including Palm Jumeirah, Deira Islands, Ibn Battuta Mall and Dragon City, the hotels range from five-star, luxury properties to mid-market offerings. Among them are five-star Palm Tower on Palm Jumeirah and a four-star, all-inclusive beach resort at Deira Islands, to be developed through joint-venture with Spain's RIU Hotels and Resorts.

Nakheel's Ibn Battuta Mall will have two hotels, one of which will be managed by Premier Inn, with another two hotels at Dragon City - the group’s rapidly developing Chinese trading hub. The first hotel, run by Accor under the Ibis Style Brand, is due to open this year.

Dubai's appetite for luxury is still present as the emirate will soon see some of the most luxurious properties open in coming years. Hotel openings this year include the five-star Palazzo Versace at Dubai Creek, movie-themed Paramount Hotel in Downtown, Starwood's first St. Regis Dubai on Sheik Zayed Road, and the first Hard Rock Hotel in the Middle East in Marina 101, the second tallest building in the UAE behind the Burj Khalifa. – TradeArabia News Service