There was some positivity among hoteliers attending the Arabian Hotel Investment Conference that oil-market pressures are easing in the Middle East market as new hotel supply comes online.
DUBAI—Emerging out of the oil slump, the Middle East hotel market is showing some encouraging signs of color, speakers said on Day 1 of a colorful Arabian Hotel Investment Conference.
In a panel discussion titled “Brand Clinic—Do you need an international brand,” Imad Elias, CEO of Roda Hotels & Resorts, lambasted all of the threats facing hotel owners—many of which are not unique to the region, including online travel agencies and brands themselves.
Shady Shaher Elborno, head of macro strategy research, global markets and treasury at Emirates NBD, also expressed a pessimistic view, saying that “even the most optimistic prediction for oil means pressures remain.”
But Robin Rossmann, managing director of STR, stressed that the “good news for the region is that we’re seeing green shoots coming through.” (STR is parent company of Hotel News Now.)
- STR data for the Middle East showed hotel performance declines for the first quarter of 2017.
- But in the Dubai market, STR data showed signs of recovery in Q1 2017.
- Click here for a look at the Middle East/Africa pipeline for March.
Dubai also is seeing notable supply entering the market. Several hoteliers commented throughout the day that with occupancy percentages in the high 80s, revenue managers are missing opportunities to raise rates.
The bottom line was that there is room for well-thought-out product in the region, but any brand regarded as mediocre is likely to suffer. The positivity comes from a market that is increasingly maturing, both on the product side and the ownership side.
Egos have gone, and the focus is on efficiencies to drive margin. That will be done, attendees agreed, by not hiding behind data, and ascertaining what the increasingly contradictory guest now requires.
Quotes of the day
“The hotel industry is ignoring millions of millennials. There are high levels of unemployment in some markets, which will lead to bad things. We have to make sure that youth understand the opportunities. They do not understand how big the industry is, that it is 10% of global gross domestic product, and they need a line of sight to a better future, as all they see is technology and social media in a 24-hour news cycle. I started literally plunging toilets.”
—Chris Nassetta, president and CEO, Hilton Worldwide, during a panel titled “Catalysts of Change”
“Owners in the region are moving away from the pride of owning luxury, but they still on occasion cannot help themselves from asking the brand to add a restaurant or even a ballroom.”
—Christian Nader, VP of development, Middle East and Africa, Kempinski Hotels and Shaza Hotels
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