Ras Al Khaimah tourism to take off as global investors see promise

Hilton

• Real estate rush includes Wynn resort and casino on Al Marjan island
• Commercial units, residential space and tourist land all in demand
• Small emirate is building its own identity and niche distinct from Dubai

Ras Al Khaimah (RAK) is learning lessons from the tourism success story of Dubai and financiers are closely watching the market and are keen to support it, according to a senior banker.

“I fully expect the growth in Ras Al Khaimah to explode in the coming years,” said Cyril Lincoln, executive vice president, global head of real estate finance and advisory at Mashreq Bank.

“The numbers are telling of a healthy property market. But even more exciting is that regional and international investors are beginning to sit up and take notice of the investment opportunities out in Ras Al Khaimah – and many have already made a move.”

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The numbers he refers to include a 45 percent jump in real estate transactions during the first half of 2022 to AED4 billion ($1.1 billion) on the back of huge investment deals, including the Wynn integrated resort on Al Marjan island which will feature the GCC’s first casino.

According to data from Ras Al Khaimah Municipality, the demand for commercial units, commercial, residential lands and touristic lands increased sharply in H1.

Running parallel to this growth is a rise in large-scale investments by local and international hospitality players, led by Wynn’s plans which coincided with Ras Al Khaimah Tourism Development Authority’s (Raktda) introduction of a gaming regulation department.

A series of hospitality and retail asset acquisitions have followed by Abu Dhabi’s Aldar Properties, including the Rixos Bab Al Bahr hotel, Al Hamra Mall and Doubletree by Hilton Resort & Spa Marjan Island, and by Abu Dhabi National Hotels and Dubai Investments who have made separate announcements detailing AED1 billion worth of resort and residential projects on Al Marjan.

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“A lot of this is happening because of steps taken in recent years, pre- and post-pandemic. Ras Al Khaimah is shaping its real estate landscape slowly but steadily by locking the fundamentals in place,” said Lincoln.

Tatiana Veller, managing director of Stirling Hospitality Advisors, the advisory arm of Ras Al Khaimah Hospitality Holding, said: “Ras Al Khaimah is an increasingly attractive market for investors and real estate owners at the moment.

“We look forward to working alongside our partners in driving new opportunities to attract further investments to the emirate, ultimately contributing to the development of the overall economy and varied sectors.”

Donald Bremner, chief operating officer of Ras Al Khaimah Hospitality Holding, said: “RAK has increasingly become an attractive investment destination and we continue seeing international hotel groups and developers locking in impressive deals to build in the emirate.

“Simultaneously, we are working towards building the necessary infrastructure to support the construction of such projects and further attract expatriates into the city.”

Over the years, Dubai has secured its spot as a global tourism destination on the back of luxurious hotels and a thriving aviation sector supported by Emirates Airline and Dubai International Airport.

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Dubai is on track to boost the number of visitors to the emirate to more than 1.1 million by 2025 and Lincoln said RAK is taking a similar route, while building its own identity and niche.

“The emirate has a low base effect. Its smaller geographic size allows it to control a lot more of the activity on the ground. If it can experience even a portion of Dubai’s ‘real estate rush’, it can easily reach explosive levels of growth,” he said.

In June, credit ratings agency Fitch released an upgraded outlook for RAK, revising the outlook from ‘stable’ to ‘positive’.

Post pandemic, the emirate has seen its highest number of visitors in the first half of 2022, recording over 500,000 international and domestic travellers – a 21 percent rise compared to the first half of 2021.

Raktda has also announced plans to increase the number of hotel rooms in the emirate to 12,747 within the next five years. The figure stood at 8,130 rooms as of August.

A critical part of its post-coronavirus economic recovery strategy has been the push for greater sustainable practices in its hospitality and leisure sectors. In 2021, Raktda set out a sustainable tourism strategy to position the emirate as a leader in eco-tourism by 2025.

Raktda is also looking to diversify the typeof hospitality offerings such as projects which are set to be built on Jebel Jais mountain, including a pop-up hotel, a lodge made of sustainable materials and an eco-friendly ‘glamping’ experience.

Speaking to AGBI in June, Raki Phillips, CEO of Raktda, said he is looking to attract a truly global audience.

“The Far East is a big market for us, that we haven’t really explored that much, but we have to be ready for the Chinese customers and others,” he said.

“Recently, we opened a new office in India. India is a big market for us in one of the fastest-growing markets. We opened an office in Latin America.

“I’ll give you an example of how we’re very forward thinking. Kazakhstan was a market that used to generate 5,000 tourists a year, a couple of years ago. Last year we had over 50,000 tourists from Kazakhstan coming to the destination and it continues to grow exponentially.”