Atlantis may expand further in Palm Jumeirah

Pixabay/8268513

• 7-hectare plot in consideration
• Waterpark may also expand
• ‘Revenge travel’ declining

Resort group Atlantis Global is “looking at different options” to expand its Dubai footprint further, despite president Tim Kelly predicting a drop in room rates across the emirate.

The company operates the Atlantis The Palm resort at the tip of Palm Jumeirah, and opened the neighbouring Atlantis The Royal property in February this year, at a cost of more than $1 billion.

Kelly ruled out another resort elsewhere in the emirate, but said a seven hectare plot of land adjacent to Atlantis The Palm, which currently serves as a parking area, could be developed and talks had taken place with parent company Kerzner International.

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“We’re looking at what to do and what are some considerations,” he said. “The first thing we want to focus on there is getting the parking right, getting the delivery system right, and then if we want to maybe consider more rooms or residences, whatever it might be, then we’ll look at that.”

He added that the resort’s waterpark, Atlantis Aquaventure, also has room to grow. This is despite it completing a huge expansion in 2021 with the addition of 28 new water slides and attractions.

Kelly revealed only 80 percent of the space in the park is being used. “We still have the ability to expand the features and the rides rather dramatically,” he said.

The park is the second most popular tourist attraction in Dubai, behind the Burj Khalifa, and hosts on average 5,500 daily visitors.

Kelly was promoted in October from executive vice president and managing director of Atlantis Dubai to president of the Atlantis brand worldwide.

Normalising demand

Speaking at a media event this week, Kelly predicted that hotel prices in Dubai would drop next year as 2024 marks the end of “revenge travel” from the Covid-19 pandemic.

But he stressed that any declines in room rate would be part of a stabilisation of the industry and not a reflection of weakness in Dubai’s hospitality sector.

Revenge travel was a phrase coined as Covid restrictions were gradually lifted, allowing people to take trips that were previously forbidden.

Dubai will have around 154,000 rooms operating by the end of 2023, a 6.4 percent increase on the previous year, Knight Frank Middle East reports.

Kelly said the average rate in the emirate is 20 to 25 percent above what it was in the pre-pandemic days of 2019.

“I think the revenge travel era is over and now we’re into the normalised process,” he said, adding that this was particularly the case on Palm Jumeirah where he has “seen some rate softening” already this year.

In the year through to the end of August, Dubai hosted more than 11 million international visitors, up almost 22 percent on the same period in 2022 and over a 2 percent increase from 2019.

The average occupancy rate within the UAE as a whole grew by almost 5 percentage points year on year in the 12 months to September 2023, according to a report from CBRE Middle East.

Although the country’s average daily rate dropped by 1.2 percent, average revenue per available room increased by 5.6 percent.

Kelly said both Palm Jumeirah resorts boasted occupancy levels of around the low 80 percent mark for the year to date.

“For us I think we want to hold the rate,” he said. “I think low 80s is where we want to be, that’s the right place and space for us.”

Kelly said the UK remained an important market. Visitor numbers are also good from France, Germany and northern Europe, and there is particularly strong interest in Atlantis the Royal from Russian and CIS visitors.