Occupants of commercial and residential buildings are no longer seen as tenants, but more as valued guests. With a growing focus on hotel-like services in real estate, investors, owners and operators are moving from single-use developments to hybrid hospitality and mixed-use projects, said industry experts at the Future Hospitality Summit in Dubai. 

 

The hotelisation of traditional assets is a hot topic for the industry – and a key focus at the FHS World, the region’s largest, most influential hospitality and tourism summit, which kicked off today (September 30) in Dubai. 

 

Leading industry leaders are sharing their experience, expertise and advice on the shift from one-use assets to multi-function, all-encompassing developments at the ongoing event. 

 

From personalised service to private clubs, there’s a growing trend in the Middle East towards hybrid hospitality and mixed-use projects as a way of diversifying revenue streams, enhancing guests’ experiences and increasing property values. 

 

Dubai-based real estate consultancy, Cavendish Maxwell, pointed out that with building occupants now seen as guests rather than simply occupants, there’s a demand for more personalised, service-orientated living and working environments.

  

"Dubai is leading the trend towards hybrid and mixed-use projects," remarked Zhann Jochinke, its Director of Market Intelligence and Research. 

 

"Investors and developers are increasingly attracted to these projects because they offer diversified revenue streams, enhance the guest experience, increase property values, create synergies, and adapt to changing market conditions," he stated. 

 

GJ Properties is switching to hybrid projects to meet demand for higher standards of living.

 

"The mixed-use market currently accounts for a large percentage of activity in Dubai’s real estate sector," stated its CEO Ali Jaber. 

 

"People want ‘hotel life’ where they live, and are prepared to pay extra for facilities like valet parking, housekeeping, tight security and retail space," he noted.

 

Rove Hotels has successfully tapped into this trend with spaces that blend hospitality with residential experiences, meeting the demands of today’s travellers and residents who prioritise community, convenience, and flexibility. Rove Home exemplifies this integration with branded residences that offer lifestyle living with hotel-like services, further enhancing the appeal and profitability of developments.

 

"Investors, owners, and operators are increasingly gravitating towards hybrid hospitality and mixed-use projects.  This shift aligns with the growing trend of integrating residential, commercial, and hospitality elements within a single development, offering a more dynamic and versatile environment," remarked its Chief Operating Officer Paul Bridger.

 

"In Dubai and the broader Middle East, this approach is particularly appealing due to the region's rapid urbanisation and diversification of its tourism offerings. Dubai's strategic initiatives, like hosting major global events and creating diverse attractions, have fostered an environment where mixed-use developments can thrive. These projects not only cater to traditional tourists but also attract remote workers, long-term guests, and business travellers, all of whom contribute to a more sustainable and resilient hospitality sector," he added.

 

Echoing this sentiment is The Ascott Limited, which is also seeing a growing shift towards hybrid hospitality and mixed-use developments.  

 

"Investors and owners see value in diversifying revenue streams by integrating residential, commercial, and hospitality elements into a single property. Our success with brands like Ascott, Citadines and Somerset reflects the growing demand for flexible living and hotel-like services," stated its Managing Director for Middle East, Africa, Turkey and India, Vincent Miccolis. 

 

"These projects offer enhanced convenience and community experiences and attract a broader range of clientele, from short-stay travellers to long-term residents," he added.

 

Anthony Lagrabette, Director - Asset Management, Hotels & Tourism, CBRE Middle East, said that increased demand for flexible real estate or hybrid hospitality goes hand in hand with the evolution of customer needs.

 

"Investors and operators are adapting to trends and the multiplication of new experience driven offerings. Traditional real estate providers are understanding the difference between short and long-term stays, business and leisure stays and what it entails in terms of service offering, meaning a more “hotel like” expectation. Hotel-like services are no longer exclusive to the hospitality industry, and this trend reflects a broader shift in how properties are marketed," he noted. 

 

While real estate hotelisation brings a multitude of opportunities, there are challenges, including navigating regulations, capital investment requirements and seasonal fluctuations, too. 

 

Bridger pointed out that opportunities include diversifying revenue streams, enhancing property values and opening up new markets.  

 

"However, this trend also comes with challenges," he said. "Integrating hospitality services into traditional real estate requires significant investment in infrastructure and technology to ensure a seamless experience. Maintaining a consistent brand experience across diverse property types can be complex and resource-intensive," he noted.

 

"To take advantage of the growing trend of "hotelisation," developers and operators must adapt and innovate, continuously adjusting to the evolving needs and preferences of consumers while navigating the regulatory environment," added Bridger. 

 

Lagrabette believes revenue is the first opportunity that springs to investors’ minds. 

 

"Diversification of revenue streams is essential for growth, and benefits both investors and operators.  It is essential to understand what value enhancing services will generate impulse purchases in order to improve guest satisfaction, in turn supporting the bottom-line.  The hotel sector is perfectly poised to demonstrate what should or should not be done – but is also a living example of how complex it can become to offer consistent service levels every single day," said the CBRE official. 

 

Jochinke said: "On the plus side, we’re looking at increased revenue, enhanced property values, diversification, synergies and job creations. But moving to mixed-use can also mean regulatory hurdles, renovation costs, competition and other challenges which developers should take into account."

 

Jaber said: "Hybrid developments provide the opportunity to increase rent, bringing higher yields. Offering more hotel rooms brings more tourism, in line with government goals on economic growth and tourism targets.  One challenge would be the costs associated with maintaining the services involved in providing higher standards of living."

 

Miccolis pointed out that hotelisation – core to Ascott’s serviced residences model – brings opportunities to elevate traditional real estate by offering hotel-grade amenities and services.

 

"By merging hospitality and residential functions, we can enhance resident experiences and boost asset value. However, the challenge lies in maintaining operational excellence and ensuring seamless service delivery across varied guest profiles. Our expertise helps us manage this balance effectively, ensuring both profitability and guest satisfaction," he added.-TradeArabia News Service