Tatiana Veller
and
Erni Wijaya
represented Stirling Hospitality Advisors at the
HOFTEL Summit Series
in Abu Dhabi last week, speaking with industry peers on the region's latest hospitality and investment developments.?
On her panel, Tatiana was joined by Guido de Wilde, Director, WASL Hospitality; Andrew Simon Milton, COO, Constance Hotels and Resorts; and Maaiz Maniku, CEO and Executive Director, HIMA Holding; to explore key insights and strategies contributing to the continued success of the UAE and the Indian Ocean in the ever-evolving tourism landscape. Here are the four main learnings:
- New guest demographics:?While every destination has its bottlenecks for attracting more travellers, the challenges can be unique.?Most established destinations like the UAE and the Maldives have retained a?loyal following, however, emerging destinations in the region such as Saudi Arabia and Thailand are gaining momentum and introducing new competition. To remain attractive, destinations must look at, and provide enhanced offerings, that cater to evolving guest demographics and needs. For instance, there is a huge rise among the middle class who can?afford travel, mainly from China and India. As the average life expectancy lengthens, empty nesters and those in their golden years travel more frequently and with increased spending power, making retirees another top segment to target.
- Adapting to Labour Trends:?With global competition in recruiting top talent, labour remains one of the bigger challenges for the hospitality industry.?European and American general managers used to dominate chain?hotels, however today this is not the case. Further, attracting an hourly workforce is becoming harder and harder every year, and new graduates from hotel schools are no longer interested in working in entry-level jobs in hotels.?
- Destination Positioning:?Having an image of an ultra-luxury destination has its pros and cons, but during an economic downturn, this will come back to bite. Although known for its luxury offerings, only about 25% of the hotel stock in Dubai is in the 5-star category. A further 20 or 25% is upscale, and the rest fall under midscale and economy. In Mauritius, guest houses and Airbnb compete with hotels occasionally, meanwhile, Maldives is looking to increase the number of more affordable hotels. The correct positioning alongside plenty of flight connections and good hotel inventory, makes it difficult for a destination to topple.
- Scope for Investment:?The UAE has seen continual hotel supply additions for the past 20 years. For investors building in Dubai, the ROI?expectations are still incredibly optimistic despite concerns about oversupply. It used to be the case that hotels here paid for themselves in four to five years,?even in the luxury category. Now, with higher?construction costs, higher interest rates and?increasing inflation, it has lengthened to eight to 10 years. However, by international standards, this is still extremely healthy and may be a?pipe dream of some investors in Europe or North America. If anything, the recent?developments around the world have drawn more investor interest to this market, as the UAE?has managed to remain neutral to all external shocks, maintaining very healthy levels of personal safety and providing additional investor protection mechanisms.?
With year-on-year growth, the UAE and the region continue to be prime travel and hospitality destinations for travellers across the world. As one of the leading hospitality advisory firms in the region, we are always updated on the latest market trends and developments. Follow us to keep up to date.
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