YOTEL recently announced plans to open its first property in Dubai – a move that kick-starts its ambitious Middle East expansion campaign.
The hospitality firm, an affiliate company of Kuwait-listed IFA Hotels & Resorts KSCC, signed a long-term agreement with Dubai Investment Properties LLC (‘DIP’) to operate YOTEL Business Bay, which is due to open in 2018.
The 42-storey YOTEL Business Bay will boast 438 ‘cabins’, furnished with the brand’s signature Techno Walls and Smart Beds, as well YOTEL’s exclusive Club Lounge – a multi-function co-working and recreational space. The property will also feature 127 serviced apartments managed by YOTEL.
The brand’s Dubai and Middle East debut marks the start of an aggressive regional roll out plan, with YOTEL also in advanced negotiations for potential properties in Riyadh, Jeddah, Istanbul and Abu Dhabi.
Why did you select Dubai for your next YOTEL?
Dubai is one of the most dynamic cities in the world and the natural hub of the Middle East, a region with huge potential for our brand. It also features the world’s busiest airports by international passenger traffic, which fits perfectly with our customers’ global profile.
Dubai has always been a strategic destination for YOTEL. We have been scouting the city for a long time; searching for the right partners and the right location. Our patience has paid dividends; DIP is a fantastic partner with an invaluable experience in the local market.
Business Bay is the ideal location for YOTEL. It is quickly becoming the city’s natural CBD owing to its central location, excellent infrastructure and easy accessibility. Our site is particularly advantageous, located directly on Sheikh Zayed Road, just steps away from the metro station and the new Dubai Water Canal Project, which will soon feature myriads of restaurants, luxury housing and walkways.
What does YOTEL bring to the UAE market that’s different?
Affordable luxury: a thoughtfully designed and decorated room that has the luxuries of a great bed, rain shower and techno-wall in a more economic footprint. For YOTEL, the property is different because it’s our first foray for the brand into a mixed-use development, thanks to the introduction of the hotel apartments. Luckily, we have IFA Hotels & Resorts’ experience in mixed-use developments, and specifically in Dubai, to guide us through the process.
Given Dubai Government’s ambitious visitor targets and its goal to diversify its accommodation offering to meet these goals, what potential is there to open more than one hotel in the emirate?
Stay tuned for more on this. Discussions are currently underway.
How will the Dubai YOTEL help set the scene for further property openings region wide?
We are certain that YOTEL Dubai will be a success and we will use this as a platform to show that there is room in the market for luxury on a smaller scale. We already know there’s a market for hotel apartments, so that aspect of the project’s success is almost a given. Once we can show there is a market segment for this type of daily accommodation, we can roll it out anywhere in the region.
What are your target markets regionally for the brand and given your advanced discussions Middle East wide, where will we see the next YOTEL announcement and why?
We have big plans for YOTEL in this region. Firstly, we see huge potential in the UAE where we could operate multiple properties in Dubai and Abu Dhabi. In the GCC, we are currently analysing opportunities in Oman and Saudi Arabia. Although these markets are very different from each other, they both have attractive tourism growth prospects given there is limited hotel supply, particularly in the affordable luxury segment, which is virtually non-existent. Further afield we are actively looking for partnerships in Turkey.
What’s the long-term growth plan for YOTEL in the region?
The Middle East is an important market for YOTEL in light of its strategic location between Europe and the Far East and given its rapidly growing economies. We see huge potential for our brand. However, it is too early to pinpoint an exact figure in terms of properties or keys. The most important priority for us is to establish the right partnerships with top local developers and identify the top sites. Thereafter we can grow very rapidly.
What’s your target market for these properties?
We like to think that we cater for most markets with YOTEL given our short- and long-stay offering. Obviously, it’s a great option for business travellers, but the concept is also ideal for leisure travellers who want to enjoy the many attractions of Dubai in comfort and at an affordable price. There are many visitors to Dubai who come for the food, shopping and nightlife and they don’t want to spend money on a beachfront hotel looking at an ocean they have no intention of swimming in.
How important is the Middle East market in YOTEL’s overall global growth strategy?
YOTEL has embarked on a global expansion plan, starting with North America, Europe and the Far East. Having said that, the Middle East is very attractive for our brand as it is home to most of the world’s super-connector airlines including Emirates, Etihad and Qatar Airways. The region therefore benefits from huge tourism inflows from all parts of the world. The domestic market is also interesting given its high internet usage and IT penetration, which fits well with our brand. GCC tourists are also increasingly sophisticated and tend to travel frequently to locations where our brand is present.
What trends are you noticing at current YOTELs in terms of booking patterns, demographics, customer demands?
YOTEL caters to vary wide range of travellers including boomers, Millennials and generations X and Y. One thing our guests all have in common is very high technology acceptance and wide use of web applications and services. YOTEL therefore invests significantly in new technologies to improve guest experiences and provide maximum flexibility. For instance, we were the first brand to replace traditional reception desks with internet kiosks, therefore reducing the check-in and check-out time to only a few minutes. At airports, we allow guests to check-in or out at any time and charge them at an hourly rate. We constantly search for new innovations and upgrade our existing web applications on a very regular basis. As a result, more than 50% of our guests book directly through our own distribution channels.