UAE HOTELS ARE READY FOR 2020
dubai — All eyes will be on the UAE’s hospitality industry as it readies itself to welcome the influx of visitors for the Expo 2020.
Experts at the Hotel Show Dubai 2018 say that technology and a focus on global hospitality best practices will be the main priority for operators in the run up to the event.
“Dubai is a very dynamic market, and the number of hotels in the city are increasing; there are about 150 hotel projects in this year alone. The market is going to be getting very competitive as a result, so it is important to stand out. What is also important is to create experiences that will appeal to your guests,” said Olivier Harnisch, CEO of Emaar Hospitality Group.
According to data compiled by Ventures, the value of the GCC hotel projects market is expected to increase from $11.15 billion in 2018 to $11.61 billion in 2019.
Much of the growth can be attributed to mega events such as the Dubai Expo 2020, the World Athletics Championship 2019, and the 2022 Fifa World Cup. The UAE itself witnessed an opening of approximately 1,200 branded hotel keys in the first quarter of 2018, and another 6,800 keys are expected to open by the end of the year.
The UAE’s hospitality market is expected to reach $7.6 billion by 2022, growing at a five-year CAGR of 8.5 per cent between 2017 and 2022. Dubai’s hotel supply, in particular, is expected to reach 132,000 by 2019.
“The way we operate hotels in the future is going to change,” Harnisch predicted. “RevPARs in Dubai are still fairly high, but operators have to get ready to deal with more volatility in the market. One of the advantages that we have in Dubai is that there is a lot of focus on customer experience; this is different from markets like Europe, where the primary focus in many cases has been cost.”
Technology, he added, has helped a lot of people in the hotel industry to merge many different roles. This helps in improving productivity, as well as making the experience as seamless as possible for the guest. However, he was quick to note that technology in itself is not the answer to all the problems in the industry.
Speaking about the Dubai Expo 2020, he said that the event was a great opportunity for the city and for the region.
“Dubai is the fourth most-visited city in the world, but there are still a lot of people that have never visited the city or the UAE. This is our chance to showcase all that is special about the city, and to showcase the hotels of the future.”
Philip Wooller, director for the Middle East and Africa at STR Global, notes that there are challenges in the market right now related to supply and demand. “RevPARs have been declining for five years now. However, that being said, it is amazing to see what Dubai has done in adapting to the increase in supply. It doesn’t matter how much supply has been added, occupancies have been reasonably strong. There are very few markets in the world that have been able to boast these consistent numbers.”
When it comes to pipelines, he noted that the UAE and Saudi Arabia are leading the way.
“Supply will increase by 13.3 per cent in Dubai in 2019, as the city gets ready for the Expo 2020. Dubai has traditionally had a great time in matching the supply with the demand, but that has changed in recent years. From a profitability point of view, the UAE still has the strongest hotel market in the Middle East. However, Dubai has to keep finding new initiatives to generate revenues in the future.”
Mohammad Al Nadi, CEO of Designs Group, said the region has seen a major boost in development of hotels due to the growing focus on developing the tourism sector in the GCC by the respective countries.
“The total value of hotel projects, expected to be completed in 2018, is projected at $9.47 billion. In addition, a lot of existing hotels are also being refurbished in the lead up to mega events like the Expo 2020 and the Fifa World Cup 2022,” he said.
“The market looks extremely promising and we can see a huge opportunity for growth B2B in the sector of furniture, fixtures and equipment, as well as operating supplies equipment,” he added.
We can see a huge opportunity for growth B2B in the sector of furniture, fixtures and equipment
Mohammad Al Nadi, CEO of Designs Group