The average occupancy rate for GCC is estimated to be 68 percent for the year 2012 and expected to reach an average occupancy of 73 percent by 2016, a recent report by Kuwait Financial Centre (Markaz) estimated room revenue in the GCC hotel sector for the year 2011 stands at $17.83 billion, and is expected to reach $24.92 billion by 2016 at a compound annual growth rate (CAGR) of 6.93 percent.
The report analyses the hospitality industry's supply-demand dynamics, estimates the current and potential market size, discusses the various investment opportunities while analyzing the major players involved. It also discusses the key drivers of growth, identifies existing and emerging trends and illustrates the challenges in hospitality industry.
The report said skewed supply of hotel rooms toward upscale and luxury segment is a key trend in the hotel industry. These hotels provide services including spa and gymnasium facilities for which the demand is on the rise. Also, some of the big international hotel chains are increasingly showing willingness to form tie-ups with local players and the latter are being recognized for their remarkable and novel services. Service apartments have grown in the GCC region with the rise of business travellers and expatriates who look for longer stays at reasonable prices.
The possibility of a negative shift in the socio-economic and political instability of countries in the Middle East could impact revenues of the region's hospitality industry. Other issues like oversupply in countries like UAE, Qatar and some parts of Saudi Arabia affected the OR and ADR values in the region. The high employee turnover and the labor laws in the region are a cause of concern for the hoteliers. The rising cost of construction coupled with stringent lending policies is some of the other key challenges in the industry.
"2012/13 has been one of the strongest tourist seasons in Dubai's history. Tourism arrivals from all regions have shown significant growth as the city's leaders have ensured that both capacity and connectivity matched the growing tourism demand and visitor requirements. Dubai is now home to the world's second busiest airport, further proving Dubai's position as a primary destination as well as a major international transit hub. Specifically in March, most of the prominent leisure destinations in the GCC including Dubai seem to have benefited strongly from the school holidays", said Peter Goddard, Managing Director of TRI Hospitality Consulting in Dubai.
Meetings and exhibitions organized in the region have boosted business tourism, which has emerged as the primary business tourism driver for countries like the UAE and Qatar. Governments are taking initiatives like roadshows and events to showcase their conference and exhibition facilities to encourage business travel. The UAE has hosted events over the years, making it the top MICE destination in the Middle East.
Oman's $1.8 billion convention and exhibition center project, which is under construction and expected to be completed by 2015, primarily aims to capture the demand for business travel. Qatar also has two major convention centers and plans to open one more in 2012.
Sports tourism is also gaining credence in the region, with the UAE leading the way. Along with being a major destination for desert sports, Dubai and Abu Dhabi are also known for water sports. Dubai also hosts the world's richest horse race event at the Meydan racecourse, which can accommodate over 60,000 spectators in a 1-mile long grandstand. When not used for races it serves as an integrated business and conference facility.
Further, Qatar will be hosting the FIFA World Cup in 2022.
Medical tourism is gaining importance as the high cost of healthcare and increasing procedure time in the US, Europe and Asia are forcing patients to look for other viable options. The healthcare market in the GCC is likely to increase at a CAGR of 11.4 percent to $43.9 billion by 2015. The medical tourism sector in the UAE is driven by Dubai Healthcare City, while that for Oman is led by Apex Medical Group's $1 billion medical city.
Cultural and ecotourism also continues to remain a driving force as various options are available across the region for visitors. Ecotourism, aimed at showcasing the region's culture and heritage, is gaining traction in the region.
Theme parks, amusement parks and various entertainment options in shopping malls attract several tourists from within the region each year.
ifpinfo
31 July
