Real Estate Development-Hospitality

A prominent real estate investor wanted to develop a five-star hotel in Dubai. In the first place, a full macro and microeconomic research indicated a decline in the sector’s growth rates due to reaching maturity.

Moreover, the detailed value generator analysis specified a reduction in growth rates from traditional feeding cities to Dubai. However, the study also indicated an extraordinary high growth rate from new feeding destinations, especially from the GCC.

Also, the more in-depth research concluded that family Hotels are extremely undersupplied. The more extensive analysis reached that Family Hotels serving the conservative GCC and further Arab family sub-segment offers the highest growth rates.

Dubai’s hospitality sector expanded at  5.3% CAGR  for the past seven years. It currently attracts 12M+ overnight visitors per year. Dubai is the fourth most visited city according to MasterCard overnight visitor analysis.  Further, Family visitors to Dubai grew at a much higher rate, estimated at 9.8% CAGR  annually for the past seven years.

Dubai offers a multitude of quality hotels, resort, hotel apartments, and furnished apartments. However, none is purely family oriented. Similarly, none of Dubai’s resorts is strictly a “Family Resort.”

Correspondingly a detailed value proposition analysis concluded the target market segment wants, needs, expectations, and aspirations. Qualitative market research picked on the likes and dislikes of current offerings. The quantitative market research concluded the development program.

By the same token, the research suggested the most sought after locations. Also, Designers concluded a highly functional and market-oriented concept for the project.

In conclusion, a strategic land acquisition strategy and joint venture structure model ensured the highest possible IRR. The project will generate a 28%+ IRR.