Rotana chief expects business to return to pre-Covid levels by next year

Abu Dhabi-based hotel operator Rotana expects to return to pre-pandemic levels of business by next year, spurred by a rebound in leisure travel, the return of business meetings and hosting of mega events such as the Fifa World Cup in Qatar and Expo 2020 Dubai, its chief executive said.

The hospitality group reached 80 per cent of its 2019 levels of growth in the bottom line during the first quarter of this year, exceeding its own target of 75 per cent, as the Gulf and Middle East region witness a revival in travel, Guy Hutchinson told The National at the Arabian Travel Market exhibition in Dubai yesterday.

“We’re still not at 100 per cent, we’re still at 80 [per cent], but we think that gap is going to continually close … because the recovery has accelerated a little bit beyond our expectations,” he said.

“We see the fourth quarter will be very strong but it’s how we now navigate the traditionally more difficult summer months to see how that momentum continues.”

In the first quarter, Rotana’s UAE, Qatar and Saudi Arabia properties recorded occupancy of about 90 per cent.

Morocco, whose borders remained closed to international travel until March, recorded 40 per cent to 50 per cent hotel occupancy. Jordan properties were full at about 50 per cent and set to accelerate, while Lebanon, which is facing a severe economic crisis, managed an “excellent” performance during the Eid holidays and is set for a “strong” summer on the back of leisure visits, Mr Hutchinson said.

UAE hotels recorded a 24 per cent increase in occupancy rates in the first quarter this year, compared with the same period last year.

This was largely due to the increased demand during the winter holidays and last three months of Expo 2020, according to a Mena hotels report by Colliers released on Monday.

Dubai and Sharjah posted the highest growth in occupancy of 33 per cent and 30 per cent year-on-year, respectively.

Rotana will “without a doubt” recover to pre-Covid levels by next year, but the “question is about how much we close that gap in 2022, it’s still a transition year”, he said. Mr Hutchinson is “extremely positive” about the direct and spillover benefit to the region from the Fifa World Cup in Qatar slated for later this year, with Dubai standing to benefit because of its flight connectivity and accommodation options.

The impact of the mega event will be seen in the fourth quarter and Rotana has registered growing interest for hotel bookings but more clarity is needed on the flight frequencies and accommodation arrangements, he said.

The Meetings, Incentives, Conferences and Exhibitions (MICE) business has also recovered faster than expected and the so-called hybrid format of events that combines online and physical presence will disappear quickly as people gain more confidence, according to Mr Hutchinson.

The six-month Expo, which concluded in March, was “beyond expectations” and “exceptionally busy” with occupancy levels jumping up to 40 per cent above 2019 levels, he said.

Rotana’s focus is to “rebuild our fundamentals” as the world has yet to fully recover to its pre-crisis travel patterns. Mr Hutchinson said the company would focus on restoring traditional feeder markets such as Germany and the UK.

When China, another major source market for the UAE, emerges from its continued lockdown from a zero-Covid policy, the two years of pent-up travel demand will also unleash growth momentum, he said.