Hotel industry is expected to assist the Middle East tourism industry to successfully overcome the current economic conditions with soaring demand for budget and premium accommodation options.
According to the statement of Robert O’Hanlon, tourism, hospitality and leisure partner at Deloitte Middle East, the Middle East tourism industry will soon rebound from the economic turmoil at a quicker pace than other regions of the world on the back of huge investments made in the tourism sector over the past ten years. Statistics indicate that the hotel industry in the Middle East recorded 11.3% rise in the number of visitors in 2008, with 18.3% increase in revenue per available room, reaching at an average of US$148 (Dh543). Despite a decline of over 10% in revenue per available room between November 2008 and January 2009, the region will be able to ride out the current economic conditions with rising premium and budget options.
The underlying wealth and quality appreciation in the region guarantee that the demand for premium accommodation will remain strong. However, budget operators are well-poised to gain significant share over their rivals, provided the present economic environment continues after 2009.
Growth in premium and budget accommodation options in the Middle East will also help to reduce the impact of global economic crisis on the region’s tourism industry. Mr. O’Hanlon noted that the budget sector had huge potential, particularly in view of the fact that the Dubai government had introduced its budget airline flydubai, whose flights were expected to commence from June 1, 2009.
Additionally, there is a robust demand for budget hotels in the Middle East, especially in Dubai as the five-star hotels segment in Dubai has almost reached the saturation level.
Moreover, Gulf nations are looking keen to invest in sustainable and long-term tourism developments to attract global visitors. They are viewing hotel industry as an important driver of their business and tourism sector.
According to a Research Analyst at RNCOS, “Apart from capitalizing on the opportunities furnished by the present economic environment, hotels in the Middle East should continue to reinforce the steps that will prove beneficial in the long-term. They should be strong enough to oppose any rate-cut. In 2009, the tourism industry’s prime focus should be survival; particularly for hotel industry, survival means to provide value-for-money services to the visitors.”
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