THE increasing importance of Dubai as a business hub for the Middle East has led to a reappraisal of hotel demands in the country.

The trend has been to build five-star luxury resorts and business hotels, but the lack of more affordable hotels for business travellers is now being addressed.

A new chain, Refad Hotels and Resorts, was launched at this year’s Arabian Travel Market, and Express by Holiday Inn, from the InterContinental Group, is moving into the emirate. Up to 20 economy-branded hotels will be introduced in the Middle East by 2009, appealing to cost-conscious business travellers.

Meridien plans three properties in Dubai, as well as the 422-room Grosvenor House under construction in Dubai Marina. Hilton is also looking at another “four, possibly more” properties in Dubai.

Yet, despite all the huge plans on the drawing board, Dubai is struggling to match bed space to existing demand. Beds are likely to remain at a premium in the next two years — only two opened in Dubai this year, the 330-room Al Qasr at the Madinat Jumeirah and the 250-room Traders Dubai, part of the Shangri-La group.

The desire for more choice by business travellers is perhaps reflected in the fact that Traders, which opened only in May, was last month named Best New Business Hotel in the World by Business Traveller magazine.

Dubai’s long-term challenge is to ensure that demand keeps up with capacity. Dubai still grabs the headlines, but investment and development plans are mushrooming across the UAE and beyond.

The Marriott’s 306-room Courtyard opened its doors in Kuwait in May, and Fairmont Hotels & Resorts is building a £60 million resort in Abu Dhabi to open in late 2006 — where Kempinski is also opening a 390-room conference hotel in time for the Gulf Co-operation Council summit in December.

Kempinski then shifts its attention to Dubai, where it will open its first property in the city at Mall of the Emirates — which has an indoor ski slope — next year.