Article Summary:

The first glimpses of corporate travel are returning to the United Arab Emirates, according to hoteliers, who add the countries’ mature hospitality and transportation offerings provide hope that business travel will come back in tandem with leisure travel.

Primary Category: Operations

Secondary Categories: Coronavirus, Middle East/Africa, News, Revenue Management

REPORT FROM THE UNITED ARAB EMIRATES—Corporate business is slowly starting to come back to the United Arab Emirates, but unified thinking from all stakeholders is the key to profitability returning, according to sources.

Sources added the UAE has the advantage of having two of the world’s currently most successful airlines, Emirates and Etihad, but that hotels, transportation, freestanding F&B, retail and everything else that makes up the guest journey and landscape must be on the same page and ready to thrive.

Speaking at a 1 June panel titled “The future of corporate travel” as part of the virtual Arabian Travel Market conference, Raki Phillips, CEO of the Ras al Khaimah Tourism Development Authority, said that while a recovery would start from domestic travelers—which he said made up 40% of his business pre-COVID-19—he is seeing the initial signs of a corporate comeback.

“(On 31 May), I spoke to one of our hotel operators who runs a 4-star hotel in the city of Ras al Khaimah,” he said. “He was telling me that 90% of his customers were corporate customers, and he is starting to see them come back. Whether they are there for meeting with government entities, but domestic corporate is coming back.

“We’re starting to see it right now. Our hotels as a market ran just under 60% (occupancy) last week, with (increases in) average rates, and that really is the capacity where we want to be right at this time,” he added. “If we’re lucky, we will see some (meetings, incentives, conventions and expositions business) come back in the fourth quarter.”

Guy Hutchinson, president and CEO of Rotana Hotels—the Middle Eastern brand now expanding into Africa and Eastern Europe—said the entire ecosystem of travel needs to work together.

“It’s not just about the hotels on their own—it’s about the tourism authorities, it’s about retail, it’s about freestanding F&B and how destinations come together and how quickly, collectively, we build trust and confidence, and how we do that quicker than destinations we compete against,” he said.

Health, social distancing and related policies must be concrete, substantial and consistent, while hoteliers on top of those need to be human, flexible and hungry for business, Hutchinson said. Guests will judge markets on the holistic nature of all of its offerings, and once they trust the entire landscape, they will return quickly, he said.

Phillips agreed.

“It’s sort of like when you do revenue management for a hotel,” Phillips said. “You have your base business, and then you build it with a little bit of MICE and corporate, some seasonality and FIT rates. It’s the same with building your destination.”

He added tourism and hospitality make up 12% of the UAE’s gross domestic product and employ more than 750,000 people.

He said the emirate of Ras al Khaimah has partnered with Bureau Veritas, a respected third-party hygiene provider to instigate checks, protocols and hygiene standards.

Amanda Frasier, EVP of standards and ratings at Forbes Travel Guide, said building up a robust and sustainable level of confidence would lead to critical mass of tourism developing.

“What we have been discussing with staff, and what we saw as being needed, was guidance as to how to deliver that great level of service, especially in the luxury sector,” she said.

Frasier said best-practices documents in relation to COVID-19 and the reopening of hotels have to be “living, breathing” documents that can evolve.

Travel corridors
Rotana’s Hutchinson said he expects business travel and leisure travel to start to grow simultaneously.

“I don’t see a differentiation between individual business travel and individual leisure travel, (but) nothing is going to be fast. It’s going to happen over an extended period of time,” he said.

Hutchinson said he does not expect to see a recovery anywhere like the numbers seen in in 2019 until the fourth quarter of 2021.

Phillips said business guests and others would also come in higher numbers due to the establishment of more international travel-corridor agreements. That is when two countries with similar hygiene protocols in place and drops in infection rates agree to welcome both countries’ citizens with no quarantine requirements.

Hutchinson said he has no intentions to make structural changes to his hotels.

“We’re being very cautious to considering design changes,” he said. “Hotels are built for 25 or 30 years. There are other factors which are in fact more influential. … In terms of investing capital now to make permanent changes to structures of hotels or designing a new hotel for how we’re operating today, that is definitely something we’re not embarking or not recommending.”

Frasier said future hotel performance gains will derive from the correspondence and communication hotels have with their business guests, both with the ones coming now and the ones who are delaying trips.

Tell guests everything that the hotel is doing and has in place to safeguard them and staff, panelists said.

“Not only at the point where the guest is arriving, but pre-arrival, what’s on the website, how are they communicating what the guest can expect,” Frasier said, “because once the guest knows what is going to happen, the further in advance of their trip or their stay that they know that, the more open they are likely to be with going through some of these new procedures.”

2 Comments

  • Masha June 9, 2020 11:25 AM Reply

    Interesting from where this corporate travel is coming given that airlines are only now starting to initiate commercial flights...majority of the business in RAK and other Emirates in terms of hotel stays is coming from staycations from
    UAE residents...

  • ADITYA RAJARAM June 9, 2020 9:30 PM Reply

    It is impossible to see a that a story of one hotel in RAK (which still seems very odd) on corporate travel and extrapolate that to the country coming back with corporate travel. The airports are closed and even stranded residents or the major number of expatriates who have lost their jobs have not been able to get on flights. Rather than use a story, it would be far more logical to use approved metrics that are leading economic indicators such as gdp figures, population increases, fdi spending and relevant PMI data.

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