More consumers than ever before are expected to travel in the coming years, despite several hurdles that are limiting the industry’s true potential.
DUBAI—Tourism experts regrouped at the Arabian Hotel Investment Conference in Dubai after digesting last month’s World Travel & Tourism Council Global Travel and Tourism Summit to pinpoint what needs to change for the sector to remain on a growth path.
“Three billion people will be joining the middle class wealth segment, according to the WTTC, by 2030. This should certainly serve as a wakeup call for the travel industry,” Jonathan Worsley, chairman of Bench Events and board director for STR Global, sister company of HotelNewsNow.com, told delegates.
“One in 11 jobs on this planet are generated in tourism,” added Geoffrey Breeze, executive director of the WTTC.
According to Visa’s “Global Travel Intentions Study 2013,” which surveyed more than 12,600 globetrotters, travelers are preparing to spend $110 more per trip than last year, averaging $2,501 per trip.
The hotel industry, particularly in the Gulf Cooperation Council, is readying itself to capture these travelers. Worsley pointed out 450 hotels are in the pipeline in the region and another 150 are opening their doors this year.
Dubai-based luxury hotel operator, the Jumeirah Group, is expanding its hotel offering in its already successful Madinat Jumeirah development in Dubai and has celebrated the soft opening of its new property in Kuwait this week on 7 May.
The operator’s performance supports its expansion strategy. Occupancies and average daily rate among its hotels globally has increased by 9% during the first quarter of this year compared to 2012’s first quarter, giving the group a healthy 22% increase in revenue per available room.
Travelers from Russia (19%) followed by the United Kingdom (16.2%) and the GCC (14.1%) were the top three nationalities responsible for filling its rooms in the United Arab Emirates.
Policies pushing travel
To increase the number of its guests hailing from the Gulf, Gerald Lawless, president and group CEO of the Jumeirah Group, would welcome a GCC common visa, an idea that has been percolating for some time now.
Gary Chapman, president of group services at DNATA, Emirates Group, believes countries relaxing their visa policies would be the answer to attracting a wide range of nationalities. He cited the United States as one pocket of resistance that changed its fortunes with a shift in attitude when removing obstacles for Chinese travelers to obtain a tourist visa.
“Hotel stays immediately went up by 60%,” he said. “The UAE leads by example making access relatively easy for people to come and visit. We have visa waivers for 30-plus countries whether there is reciprocal visa arrangement with a particular country or not.”
Lawless welcomed the International Air Transport Association’s proposal for global e-borders to become a reality by 2020 to smooth and speed up air travel, similar to the existing electronic visa systems as applied in Australia and the U.S. For those countries who are concerned about security, he said it would rather enhance security than not.
Jumeirah’s Dubai hotels recently have seen a 115.2% increase in Australian guests, due to a different reason: the still young Emirate Airlines-Qantas partnership.
“The hotel industry is blessed with the airlines commitment to increase passenger numbers. We’re making the job easy for hoteliers,” Chapman said.
Being on the ground, hotels also have it easier to achieve the much-called-for “green” label.
Lawless recalled an environmentalist challenging him to get rid of plastic at the WTTC Summit. He responded listing the green measures the group already is taking, but he promised he would do what is possible.
Up in the skies though, airliners carrying the hotel guests have a much harder time going green. Sustainability is a journey in itself, Chapman said.
“People want to travel, and you’re certainly not going to stop that, and taking them is our job. The biggest issue is with overflying, wasting fuel, linked to air traffic control. It is in the governments’ power to reduce fuel consumption by 10 to 15%, if they could replace archaic air traffic control systems some still have at present,” he said.
Dubai Airports’ CEO, Paul Griffiths, pointed out that while air traffic is responsible for 2% of the world’s CO2 emissions, significant inroads already have been made.
“The airline industry is targeting zero carbon emission flights, but it’s a scientific challenge. However, passenger numbers per movement has increased to 208 per flight, meaning airlines have become more fuel efficient,” he said.
Griffith said taxes are another obstacle to getting the projected three billion would-be travelers off the ground. “Governments, which haven’t done so yet, need to stop taxing the travel industry,” he said.
Added Lawless: “We need to stop the so-called legacy airlines and give everyone the same rights. Hotels can build anywhere in the world they want, so why can’t airlines fly wherever they want?”