DUBAI- Hospitality leaders said today(May 5th) at The Arabian Hotel Investment Conference (AHIC 2014), at Madinat Jumeirah in Dubai, that The Middle East region generally and the GCC in particular remains one of the brighter points in the global economy.
Nenad Pacek, Co-founder of the CEEMEA Business Group, who talked exclusively today at AHIC about his perspective regarding MEA business, economic and political outlooks and corporate priorities for expansion, said,“Western European growth is still low and the central and eastern European region is underperforming. Russia is coming to zero growth because of the Ukrainian crisis. Suddenly emerging Asia is slowing, Latin America is almost a replica of emerging Asia, and Brazil is down since the devaluation, so if you are a global CEO you don’t have too many places driving growth other than sub-Saharan Africa and the Middle East and North Africa.”
“Competition is growing across the world tremendously. It is really intense. The primary reason for this is that all multinationals are desperate for growth, and corporations from China and other new global players are contributing to competitive pressures.” Pacek added.
At the Industry Performance Review session that took place also this morning at AHIC 2014, Elizabeth Winkle Managing Director at STR Global, said that the Middle East was the world’s most buoyant hotel market in the year ending March 2014. Some of the strongest ADRs (average daily room rates) across the world are to be found in the Middle East. Winkle said that some of the strongest occupancies in the world are also in the region, and that the Middle East markets with significant first quarter ADR rises were Dubai and Jeddah. Occupancy growth of 10 per cent or more was recorded in the year ending March 2014 in Abu Dhabi, Amman, Doha and Manama. The ADR rate in all four markets was down on a year-on-year basis due to rising supply, particularly in Abu Dhabi. Dubai has seen occupancy rates in the first quarter of 88 per cent.
Any market operating at an occupancy rate of more than 62 per cent is deemed to be operating very effectively. More than 18,000 new Middle East hotel rooms came on line in the year ending March 2014. Winkle also said that if every planned hotel came on line, there would be a 40 per cent rise in the number of Middle East hotel rooms. She said that there were almost 35,000 new rooms in the hotel pipeline in Saudi Arabia and the UAE. There are 10,000 rooms under construction in Dubai.
At the Defining the Growth Markets panel session today, Mr. Jean-Jacques Dessors said,“With one new hotel opening every second day (including one ibis opening every three days) Accor keeps on consolidating its position as a leader in the hospitality industry worldwide with over 3,600 hotels and 450,000 rooms operated in 92 countries. Brands are a promise. They tell consumers what service quality they should expect from the product. Accor has invested lots of efforts on the image of its brands, operational excellence and distribution platform to benefit both Owners as well as Guests.”
Andrew Clough, senior vice president, Hilton Worldwide Asia Pacific and Middle East also commented: The panel ‘Defining The Growth Markets’ was a robust and insightful discussion by experienced industry leaders and which clearly demonstrated why we have confidence in the scale, diversity and excitement of the Middle East market.’
Owner and Operators – Making the Marriage Work was another key session that took place at AHIC today, that discussed what the management companies are bringing to the table and what value do owners feel they are creating.
Pascal Gauvin, IHG, Chief Operating Officer, India, Middle East and Africa and panellist who was one of this sessions key participants commented: “The Middle East continues to be a critical part of our international success at IHG and we see immense potential across the region as the market matures and diversifies. We are noticing a changing focus in hotel owners and investors in the region as they start looking to a wider variety of hotel brands, from luxury to those catering to the value-conscious, and taking a closer look at how to maximize revenue through additional services such as spa facilities and providing a broader range of F&B choices.
Gauvin added: “We are looking towards exciting times ahead in the Middle East as we expect to grow by nearly 35 per cent across the region over the next three to five years. We are especially excited about opening the prestigious InterContinental Dubai Marina at the end of this year and launching a new IHG brand in the region with Hotel Indigo to open in Riyadh in 2015.”
An update on North Africa was also given at AHIC today, where Lahcen Haddad, Moroccan Minister of Tourism said,“The Moroccan tourism sector is guided by a strategy for tourism Development called Vision 2020. Our aim is to make of Morocco, by 2020, among the top 20 global destinations and will emerge as a reference in the Mediterranean region for sustainable development. With an objective of doubling the size of the sector, we are establishing tourism as the first industry of the country.”
In the coming weeks, the Hospitality Asset Manager Association (HAMA) is expected to open an Affiliate headquartered in Dubai, covering the Middle East and Africa. This exciting launch comes at a pivotal time in the MEA region’s hotel industry when asset management has emerged as the central element to hotel ownership. HAMA MEA will seek to support the evolution of the hotel asset management profession across the region while furthering the Association’s global footprint, which currently has established affiliates in USA, Asia Pacific, Japan and Europe.
“HAMA Asia Pacific has been instrumental in connecting hotel ownerships entities giving us leverage towards Management companies and hotel partners. Yearly we have seen benefits arising from the conferences we have organized and it has provided a positive platform for Hotel Asset Managers to share market insights and mutual innovative work trends. The MEA Affiliate will benefit the region increasing hotel properties and align ownership interests” says Alex Sogno, President of the HAMA AP.
Wolfgang M. Neumann, President and CEO of The Rezidor Hotel Group, announced said: “We are delighted to welcome three iconic hotels to Quorvus Collection, our latest luxury brand. Each property has its own unique style, personality and heritage with one essential factor at the core – a five-star luxury hotel experience.”
“Growing our brand in the Middle East is an essential part of our long-term expansion strategy”, says Sven Doliwa, Vice President Sales and Business Development EMEA at Worldhotels. “With the non-standardised upscale hotel segment gaining appeal amongst owners and hotel operators in this region, we see an increasing demand for our unique branding solution. Our Full Licence branding model offers hotel owners and operators the opportunity to remain independent while benefitting from high return on investment, a global sales network of more than 30 sales offices worldwide, a loyalty programme and quality brand recognition.”