Millennials prefer quality over luxury
dubai — Industry experts discussed the influence of millennials and their preference for quality over luxury, as well as the rise of a new breed of trendy and tech-friendly mid-market hotel brands at a panel session.
Held at the new ATM 2016 Global Stage and moderated by Vikram Loomba, director of hospitality & leisure for PwC, the hour-long panel ‘Great Mid Market Hotel Debate’ addressed the status of the growing midtier accommodation segment in Dubai, including the current landscape, key barriers to entry and potential opportunities.
“Dubai will be home to somewhere between 20,000 and 35,000 mid-market rooms by 2020 and this surge in supply supports the PwC research, which flags a growing global movement away from luxury, and towards affordability, even from those for whom budget is not a primary concern,” said Nadege Noblet Segers, exhibition manager, Arabian Travel Market.
“This is being driven predominantly by the rising affluent middle class in key markets such as Asia, and with Dubai set to host Expo 2020 and Qatar, the 2022 FIFA World Cup, the midmarket segment is the fastest growing in terms of demand and pipeline,” she added.
According to PwC, travellers opting for mid-market accommodation are looking for a well-connected location, clean rooms, uninterrupted WIFI, apps and accessibility via various technology platforms. The panel line-up included Mark Allaf, cluster general manager, Hilton Worldwide; Oliver Granet, managing director & COO, Accor Hotels Middle East; and Chris Newman, corporate director of operations, Emaar Hospitality Group.
PwC used the example of Dubai as a regional case study, citing its current position as a luxury destination, which, as the city moves towards market maturity, is attracting a more diversified visitor profile supported by an enhanced offering.
Comparing the city’s offering to major international destinations, Dubai is lagging behind in terms of mid-market product at 51 per cent with 88 per cent, 89 per cent and 90 per cent of hotels in London, New York and Los Angeles in the affordable bracket; 66 per cent of all Paris’ accommodation ranked mid-market and 76 per cent in Hong Kong.
“With more and more Chinese and Indian travellers heading this way — and being actively targeted by both the Dubai and Abu Dhabi tourism authorities; the development of large-scale tourism projects, the unique behaviours of millennials and a reduction in corporate travel budgets in straitened economic circumstances, the budget-friendly market is ripe for investment and development,” said Loomba.