Hotels and Hospitality Industry Update – Q1, 2015
It is predicted that the hotel and hospitalities industry will see a formidable growth in the coming years thanks to two large mega events (Dubai Expo 2020 and Qatar World Cup 2022) as well as the improving economic situation throughout the region and the world.
Such mega events have increased the demand for rooms with Qatar expected to need a further 45,000 rooms to meet FIFA World Cup capacities with 21 of those hotels expected to be completed by 2017.
Dubai has estimated the need for a further 140,000-160,000 new rooms by 2020 with a further 10,000 needed for refurbishment as well. This will see a sharp increase in work for construction companies and the need for hotel managers and other staff.
The key trend looking forward to Q1 2015 and in the next decade is the evolution of a new generation of customers, named “digital natives” by PwC in their middle east hotels report.
With a demand for mobility, flexibility and access to easy and reliable information, customers will now be more prepared and informed than ever so the need to understand the customers needs and ability to use a multitude of channels to do so should be at the forefront of hoteliers minds.
How does each country shape up heading into 2015?
Buoyed by the excitement of the Expo 2020, the hotels industry continues to see strong growth for Q1; growth that is anticipated to continue for the next decade. Growth is expected to rise to 4.2% in 2015 with the market expected to be worth $7.5 billion by 2016.
One of the main projects currently underway from Sheffield Holdings has announced its Marina 101 project is over 80% complete and is likely to finish completion near the end of Q1 and Q2 of this year.
Owing to the surge of regional travel across the Middle East, the Qatar tourism sector has seen a large increase.
Qatar’s national tourism strategy is aiming to boost the number of international and non-regional travel. With a priority of promoting tourism, combined with the FIFA WC 2022, Qatar should see a significant rise in the market looking into 2015 and into 2019.
Qatar’s geographical proximity to other GCC nations and ease of access is another driving factor behind their faster than expected growth in overall tourist arrivals.
A main shift for the Suadi tourism industry is the development of a tourist visas for religious purposes. 2015 will be the first full year it is in effect, so how this will affect visitor numbers will be interesting.
Home to Mecca and Medina, the religious significance means millions of visitors visit every year, however, the new ‘Extended Umrah Tourism Programme’ visa is anticipated to increase the numbers of tourists this year. 65 countries are now eligible for this new visa.
Jeddah, Saudi Arabia’s second largest city is likely to be the front-runner in terms of hotel performance and the biggest target for hotel investors for 2015 and beyond. Occupancy rates are the main positive trend for 2015, increasing to 80.% in Q1; a 2% increase from the year before.
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