Report: GCC hospitality industry to sustain growth
Saudi Arabia expected to be the largest market in terms of revenues
The GCC hospitality industry is expected to grow at an annual rate of 9.5% to $35.9bn by 2018, compared to the $22.8bn in 2013, says a new report published by Alpen Capital.
According to the GCC Hospitality Industry Report, average occupancy rates are likely to be in the range of 68% and 74% between 2013 and 2018, while average daily rate is likely to average between $225 and $263 during the same period.
Saudi Arabia is expected to continue its dominance as the largest market in terms of revenues, followed by the UAE. Upcoming mega events in Qatar and UAE are expected to be the key growth drivers for the hospitality industry in these countries.
“The GCC economies are well on their way to recovery from the global economic crisis,” said Sameena Ahmed, managing director, Alpen Capital. “With the recent wins in mega events like the Qatar FIFA World Cup 2022 and the Dubai World Expo 2020, the region is gearing up for an increase in tourist arrivals.”
“Due to the forecasted increase in demand, the sector is going through capacity expansion as well as increasing investment into infrastructure,” Ahmed says. “The industry is expected to sustain this growth momentum supported by the regional governments’ initiatives to grow the sector, international tourist arrivals, especially those from the Asian region, and growth in the MICE segment among other factors.”
Sanjay Bhatia, managing director, Alpen Capital, added: “The focus of GCC economies on education, healthcare, MICE activities supported by the aviation sector, have fueled the growth of the dynamic hospitality sector.”
“The sector will continue to grow driven by factors such as the shift in global activity from the West to the East, increase in leisure travel, growing demand for serviced apartments, shift towards budget travel and quicker construction pipeline,” Bhatia said.
“The industry does face some key challenges which include, maintaining demand beyond the planned mega events, competing with newer projects/ concepts and attracting skilled labour to the region,” Bhatia added.
“However, we feel that the growth of the sector will be driven by supportive policy initiatives undertaken by GCC governments to enhance infrastructure; thereby positively impacting the continued investor appetite for the region and tourism,” he concluded.