Taking the hospitality pulse of the region

With the new year almost upon us, Nada Alameddine, partner at Hodema Consulting Services, assesses the performance of the region’s tourism industry, and more specifically, its hospitality sector, charting present and future trends

The overall outlook for the industry is generally positive, with the Middle East asserting itself as a global hub for travel and tourism, although not to the levels it has reached in recent years. In the Gulf, international tourist arrivals have increased by 8.44 percent year-on-year (y-o-y) to 58.2 million, while across the GCC, over 1,156 hospitality projects are under construction. The surge in middle class millennial visitors from the United States, Europe and notably Asia, alongside others from within the region itself, has generated a shift in demand toward a more affordable offer, such as 3 and 4-star hotels, and serviced apartments, but also rented private properties, such as Airbnb. The market is only just starting to take account of this new phenomenon.

Dubai: gearing up for World Expo 2020

With the World Expo 2020 on the horizon, Dubai, the traditional flag bearer, is giving its all, despite experiencing lately, an economic and construction slowdown. The city-state is expecting a record number of people for the event, with a target of 20 million visitors in two years. As of now, the hotel and furnished service apartment supply stands at 108,000 available units, which is expected to increase to 132,000 by the end of next year. Much of the new accommodation will be in the 3 or 4-star categories, filling a long-term gap in the market, and expected to draw a more diverse, budget-conscious clientele. While smaller and quieter, Abu Dhabi won’t be left on the sidelines, with its government actively marketing the UAE’S capital as a leisure destination, offering major tourist attractions that include Sheikh Zayed Grand Mosque, Ferrari World, Warner Bros. World, YAS Island and Saadiyat Island, among others. The emirate has close to 22,000 hotel rooms available, with prestigious names, such as Kempinski, opening new properties.

Qatar opens its doors

Qatar has also started a charm offensive toward foreigners, which includes a new visit-visa policy. Nationals from 88 countries can now enter Qatar visa-free or free-of-charge. This move has prompted a surge in visits and y-o-y increases in arrivals from key markets, including: India (up by 18 percent); China (up by 43 percent); and Russia (up by a record 366 percent). Qatar has a busy schedule ahead, prepping for the FIFA World Cup 2022. The country is required to have 60,000 available hotel rooms for the event, as per FIFA guidelines, and is even considering accommodating football fans on cruise ships during the tournament. Qatari authorities also aim to attract 5.6 million visitors annually by 2023 as part of their National Tourism Sector Strategy 2030, which is supporting efforts to diversify the economy.

Like its Emirati neighbors, Saudi Arabia has a lot on its plate, with a bustling religious tourism sector and a highly ambitious plan

Saudi Arabia eyes leisure offerings

Like its Emirati neighbors, Saudi Arabia has a lot on its plate, with a bustling religious tourism sector and a highly ambitious plan - Vision 2030 - to diversify its oildependent economy. The authorities have thus implemented higher pilgrim quotas and increased leisure offerings to attract more visitors. The country now has 477,000 rooms, with more than 65 percent of the supply located in Madinah and Mecca. In addition, more than 94 hotels that will provide a total of 40,000 rooms are currently under construction. Riyadh’s hotel market consists of 12,000 rooms, with the number expected to reach 15,000 by 2019. Construction activity is also evident in Jeddah, which has 10,000 rooms currently available and a further 2,500 under construction. The country’s economic capital, Riyadh, welcomed 5 million visitors in 2017. The market is expected to strengthen in the coming years, with the introduction of homegrown boutique hotels, as well as lifestyle hotels, alongside conventional, upscale corporate properties. The latest additions are: Hilton Riyadh Hotel & Residences; Copthorne Hotel Makkah (Jabel Omar); Swiss-belhotel Al Aziziya Makkah; Millennium Hotel Jeddah; and Hilton Garden Inn Al Khobar.

Oman’s tourism ambitions

Although less ambitious than its Saudi neighbor, Oman also has its sights set high when it comes to developing its tourism industry. The country is targeting 7 million tourists by 2040, including 2.7 million for the capital Muscat. Additional infrastructure – such as a larger international airport – is planned, as well as a new business hub, which will be developed in the desert. The sultanate has plans for the former sleepy outpost Madinat Al-irfan to compete with Dubai in the near future. The Mall of Oman and The Wave complete the leisure offer. Muscat currently offers 9,600 rooms, with a further 3,400 currently under construction and expected to be operational by the end of 2018. Oman has plenty of potential to become a regional cultural hub, but the authorities are all too aware that their economy still feels the weight of fluctuations in oil prices.

Egypt and Lebanon under pressure

In Northern Africa, Egypt is still struggling to regain its title as favorite destination for