The GCC’s hospitality market is expected to grow at a 7.6 per cent CAGR from an estimated $25.4 billion in 2015 to $36.7 billion in 2020, according to Alpen Capital, a leading investment bank.
The RevPAR (revenue per average room) in the UAE is anticipated to rise at an annual average of 1.8 per cent to reach $143 by 2020, stated Alpen Capital in the new hospitality report.
Despite a challenging period last year and a weak average rate environment in 2017, the market is likely to recover in the long-term, driven by rise in tourist arrivals stemming from upcoming mega events and government efforts, stated the report released ahead of a key event to be attended by top industry players, including hotel owners, developers and investors, in Abu Dhabi.
The Gulf Indian Ocean Hotel Investors’ Summit (GIOHIS 2017) will run from February 6 to 7 at Yas Viceroy with around 90 speakers, including 34 hospitality industry CEOs, confirmed to participate.
The event will offer a global range of perspectives with speakers attending from across the globe, including Australia, Sri Lanka, Thailand, Singapore, Mauritius, the Maldives, Bahrain, Qatar and Saudi Arabia.
According to industry experts, the increasing numbers of travellers from newer source markets like India, China, Far East and Saudi Arabia will eventually allow a return to growth in the region’s large hotel industry, but only after a tough period ahead.
“Diversification in new source markets will eventually allow a recovery in hospitality industry performance levels as emerging inbound markets gain traction,” remarked Simon Allison, the chief executive of Hoftel, the organiser of GIOHIS 2017.
A global network of 70 hospitality real estate companies and hotel property investors, Hoftel uses third party brands to manage or distribute their hotels.
Marko Vucinic, senior VP (Mena), Hotels and Hospitality Group, JLL Mena, said India is now Dubai’s first source market and countries such as China are targeted by Department of Tourism and Commerce Marketing in their campaigns and actions.
“The UAE market will remain under pressure in the short term, while in the long term we expect more positive sentiment. The UAE is currently building its place on the international map with the addition of new leisure, entertainment and tourist offerings,” he noted.
However, Simon notes that Hoftel’s owner members are all concerned about the long-term trends in the sector, where the large hotel brands are consolidating into giant travel companies to combat the marketing power of the online travel agents, who are meanwhile strengthening their grip on the online booking market.
“Owners are usually far smaller than their business counterparts (brands, OTAs and lenders) and so face a struggle securing the right deal. They are still paying much the same fees to the brands as they were before the rise of the OTAs – and are now paying OTA commissions on top. That’s hitting margins and owners are looking for ways to unite and leverage their combined strength – a theme that will be a key focus of GIOHIS. If they can do that, they will benefit fully from the upturn, when supply and demand stabilise,” he added.-TradeArabia News Service