Plenty of room for more hotel rooms

By Rebecca Bundhun  www.thenational.ae

There is still ample scope for the hospitality sector to expand across the Middle East, analysts say, after the global economic crisis stunted the growth of the region’s hotel industry.

“In the long term there’s a need for additional hotels in the region,” said Jonathan Worsley, a board director of the hotel industry research company STR Global in London and the chairman of Bench Events, which is organising the three-day Arabian Hotel Investment Conference in Dubai on Saturday.

But Mr Worsley cautioned that the industry could face funding hurdles as it grows. “It is much more difficult to develop nowadays with the lack of finance available,” he said. “There is still an issue with the whole investment side and there will be for a period of time until the banking crisis resolves itself.”

Mr Worsley said development of new hotels had been hit by the financial downturn.

Hotel investors are particularly interested in investing in Saudi Arabia, Morocco, Oman and Lebanon, where sustainability and environmental issues were also likely to be a focus. “That’s becoming standard globally,” Mr Worsley said. “Hotels are having to act responsibly. I don’t think the industry has a choice.”

The STR chief believes the hotel industry is showing signs of recovery globally sooner than predicted.

“It’s very encouraging. I think it’s happening slightly quicker than we anticipated,” Mr Worsley said.

Total hotel guest revenues in Abu Dhabi, fell 5 per cent in the first quarter compared with the same period last year to Dh1.15 billion (US$313m), according to data released by the Abu Dhabi Tourism Authority (ADTA) yesterday.

The lower revenues are being shared by a far greater number of hotels. “These results have to be judged in light of Abu Dhabi’s growing accommodation inventory, which has gone to 17,600 rooms in the first quarter of this year from just under 13,000 this time last year,” said Mubarak al Muhairi, the director general of the ADTA.

The falling room rates have offered a silver lining by making Abu Dhabi more competitive with other destinations, and spurring growth in demand. The data showed 462,173 guests stayed in Abu Dhabi’s 116 hotels and hotel apartments in the first three months of the year, a 19 per cent increase on the same period last year.

But because more hotels are competing for guests, occupancies and rates have fallen sharply.

The tourism authority said it was on track to achieve its target for the year of 1.65 million hotel guests, up from 1.54 million last year. “We will keep our foot on the pedal in terms of building destination awareness and appeal,” said Mr al Muhairi.

The ADTA is aiming to grow the number of tourist arrivals, with the vast majority of its guests visiting the capital for business.

The number of hotel guests from within the UAE increased by 25 per cent to 191,949 in the first quarter of this year.

The UK was the top market for overseas guests, which represented 31,320 visitors, up 19 per cent compared with the first quarter last year. The GCC was the next biggest market, with 26,685 guests, up 29 per cent on the previous year.

The expansion of Etihad Airways, which recently launched flights to Tokyo, was also likely to help increase demand, the ADTA said.

Abu Dhabi’s hotel room stock is set to rise by 4,000 rooms this year. Another 11 hotels are expected to open by the end of the year, including the Venetian-themed waterfront resort the Grand Canal Abu Dhabi.

rbundhun@thenational.ae

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