CAT­A­LYSTS OF CHANGE UN­VEILED AT AHIC 2017

Hospitality News Middle East - - EVENTS - ara­bi­an­con­fer­ence.com

Now in its 13th year, the an­nual knowl­edge and net­work­ing plat­form for the global hos­pi­tal­ity in­vest­ment com­mu­nity, AHIC, at­tracted more than 700 del­e­gates keen to bet­ter un­der­stand re­gional hos­pi­tal­ity mar­ket fun­da­men­tals, op­por­tu­ni­ties and in­vest­ment po­ten­tial.

The econ­omy and mid-mar­ket ho­tel seg­ment was iden­ti­fied as pre­sent­ing a sig­nif­i­cant op­por­tu­nity for ho­tel own­ers and op­er­a­tors alike at the Ara­bian Ho­tel In­vest­ment Con­fer­ence 2017 (AHIC), held at Mad­i­nat Jumeirah in Dubai from 25-27 April, 2017 and or­ga­nized by Bench Events and MEED.

Ex­pert speak­ers also iden­ti­fied a gap in the mar­ket for more ex­pe­ri­en­tial ac­com­mo­da­tion and en­ter­tain­ment at­trac­tions, es­pe­cially in Dubai, as the mar­ket con­tin­ues to di­ver­sify its hos­pi­tal­ity of­fer­ing.

Mid­scale reigns

In an ex­clu­sive pre­sen­ta­tion, STR man­ag­ing di­rec­tor Robin Ross­mann pro­vided in­sight into the mid­scale pipeline and per­for­mance in the GCC, re­veal­ing that mid-mar­ket sup­ply is set to match lux­ury in the GCC by 2021. Ac­cord­ing to STR, the ‘Mid­scale’ has out-per­formed the ‘Up­scale & Up­per Mid Classes’ and ‘Lux­ury & Up­per Up­scale’ classes since 2011 across the GCC. Ross­mann ob­served that mid­mar­ket ho­tels are un­der-pen­e­trated and pointed to sig­nif­i­cant growth po­ten­tial un­der­pinned by grow­ing in­tra-re­gional travel and de­mand for af­ford­able travel.

Com­ment­ing on the trends, Jonathan Wors­ley, chair­man, Bench Events, board di­rec­tor, STR and co-founder of AHIC, said, “The mid-mar­ket has been dis­cussed at AHIC for sev­eral years, but in 2017, we have wit­nessed a sig­nif­i­cant shift as the com­pelling in­vest­ment model for lower de­vel­op­ment costs and higher, quicker re­turns has put the mid-mar­ket in fa­vor. It was fas­ci­nat­ing to ex­plore the long-term view, look­ing at costs, rate strat­egy and re­turns with our many speak­ers and spon­sors.

“Tes­ta­ment to the po­ten­tial for the mid­mar­ket in the Mid­dle East is the launch of Us-based hote­lier Choice Ho­tels In­ter­na­tional in the UAE and Saudi Ara­bia, with a pipeline of seven signed ho­tels al­ready and many more to come. We were de­lighted to wel­come Stephen P. Joyce, pres­i­dent & CEO, Choice Ho­tels In­ter­na­tional, Inc, as one of our key­note speak­ers to gain in­sights from one of the world’s leaders in the mid­mar­ket ho­tel in­dus­try.”

Com­ment­ing on the com­pany’s ex­pan­sion, Stephen P. Joyce said the growth of the mid­dle class and de­mand from trav­el­ers for qual­ity, mid­scale ac­com­mo­da­tion had fu­eled Choice Ho­tels In­ter­na­tional’s en­try to the Mid­dle East with three of its brands: Clar­ion, Com­fort and Qual­ity. “His­tor­i­cally when you look at this re­gion and what peo­ple con­sid­ered mod­er­ate, they kind of pull the chan­de­lier and pull the mar­ble and they don’t change the op­er­at­ing model,” Joyce said.

In a ded­i­cated ple­nary panel ses­sion fo­cused on in­vest­ment in the mid-mar­ket, Elie Younes, vice pres­i­dent busi­ness de­vel­op­ment MEA for The Rezi­dor Ho­tel Group, echoed this. “We are very ac­tive in the mid­scale mar­ket in the Mid­dle East, with 20 per­cent of our prop­er­ties within that bracket. How­ever, we have more in the pipeline along with ser­viced apart­ments. Op­er­a­tional ef­fi­ciency starts at the de­vel­op­ment of the prod­uct; you may not need a com­pre­hen­sive back of house and you can re­duce the staff-to-guest ra­tio,” said Younes.

The fu­ture of Dubai re­quires out-ofthe-box think­ing

In a sep­a­rate ses­sion fo­cused on Dubai and The Next Five Years 2017-2022, Gur­dish Bassi, Econ­o­mist at GRMC Ad­vi­sory Con­sult­ing, re­vealed in­sights into tourist spend pat­terns. He pre­dicted that to­tal tourist spend in Dubai is ex­pected to reach AED 144 bil­lion by 2021, com­pared to AED113 bil­lion in 2016 and that the largest spend­ing in­crease would be in the en­ter­tain­ment sec­tor. Bassi said, “Shop­ping malls may not have it all; en­ter­tain­ment and ex­pe­ri­en­tial con­cepts will cap­ture a sig­nif­i­cant pro­por­tion of to­tal spend.” Klaus Ass­mann, vice pres­i­dent – hos­pi­tal­ity and re­tail, Dubai Parks and Re­sorts, added his views on the fur­ther po­ten­tial for Dubai.

The con­ver­sa­tion at AHIC cen­tered around the theme Cat­a­lysts of Change, with tech­nol­ogy and dig­i­ti­za­tion high­lighted by many speak­ers as hav­ing a ma­jor im­pact on the fu­ture of the hos­pi­tal­ity in­dus­try and also fea­tured dis­cus­sions cen­tered around top­ics in­clud­ing as­set man­age­ment, over­seas in­vest­ment, F&B, brands, third-party man­age­ment and al­ter­na­tive in­vest­ment mod­els.

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