With much of the global economy still struggling to shake off the shackles of recession, especially in the US, UK and Europe, regional hoteliers are beginning to recognise the vast number of new hotel rooms coming to market as more of an opportunity than a threat.
During the official tour of The Hotel Show today, the Middle East's leading dedicated trade event for the hospitality and leisure sector. HE Khalid bin Sulayem, Director General at the Dubai Government’s, Tourism & Commerce Marketing Department commented:
“There are between 16,000 and 20,000 hotel rooms to enter the Dubai market by the end of the year, which will contribute to producing lower room rates and attracting more visitors to Dubai”
Echoing those sentiments, a study unveiled today at The Hotel Show, by Dubai-based research company, Proleads, reported there are currently over 470 active hotel projects (those not completed, on-hold or cancelled) in the GCC countries. The breakdown per country is as follows; UAE - 258, KSA – 83, Oman – 39, Bahrain – 35, Qatar – 29 and Kuwait – 27.
“Originally when these projects were conceived, the regional hospitality industry was booming. The projects were being built to satisfy future demand, said Ray Tinston, Sales Director, The Hotel Show. “However with the global economic downturn still clearly evident and further worries about a double dip recession, hotel owners and operators are now looking at the situation philosophically.”
A recent Deloitte analysis of STR Global hotel data revealed that revenue per available room (RevPar) rates in the Middle East was estimated at $131.42 during the period year-to-date February 2010, compared to $151.51 during the corresponding period in 2009. These figures however are considerably higher than other regions in the world. For example, Europe recorded an estimated rate of $72.05 with $79.65 in Asia Pacific, during the same period.
“If the region is to compete globally RevPar rates need to be competitive. That could still benefit hotel revenues. By increasing occupancies at slightly lower rates, operators can still capitalise on the peripheral food and beverage spend.
“The Proleads figures show estimated cash expenditure this year on hotel projects under construction across the GCC will top $1.17 billion and the number of active projects is actually accelerating by 11.4%. These figures underscore the region’s long term ambitions. The region will have the best hospitality infrastructure in the world and some of the finest hotels and resorts, when the global economy finally emerges from the downturn,” said Tinston.
Now in its eleventh year, The Hotel Show is the Middle East’s most important event on the hospitality calendar hosting the latest products, services and technologies for the hotel, catering and leisure industries. In 2009, the show attracted 8,474 key industry decision makers from 77 countries.
The Hotel Show is divided into four zones: Interiors & Design; Operating Equipment & Supplies; Security & Technology; and The Resort Experience, covering all things outdoor including furniture, accessories and design and includes Hotel Spa, an important sector with more than 60% of all spa activity in the Middle East taking place in hotels. Alongside the show, are high level seminar programmes - The Seven Star Conference, now in its fifth year, and the Middle East Spa Summit.
