Hotel occupancies set to slowly pick up in summer, experts say
Hotels across the UAE and the Middle East region will slowly record an increase in their occupancies during the upcoming summer months, experts said at the Arabian Travel Market (ATM Dubai 2020).
Speaking during a panel session on the hotel landscape in a post Covid-19 world, Christopher Lund, head of Hotels, Mena region, Colliers International, said that there is still lots of uncertainty in the industry, and that hotels will have to operate for a while with reduced occupancies.
"What we are seeing for 2020 in the region is potentially a drop in occupancy of 42 per cent," he said. "We know that after the summer, the numbers won't hit the typical 70-80 per cent occupancy rates, but we hope that they will improve from today's numbers. For 2021, we do expect the market to improve Q2 onwards, but, we will still be below 2019 levels. We expect a 46 per cent increase over 2020 during that year."
He also explained that the markets which will rebound the fastest are those that have typically had the highest occupancy rates in the past such as the UAE and Egypt. What will be important in 2020, he stressed, are trust and transparency. Hotels will have to be creative and realistic, while following government guidelines.
No dropping average room rates
"We had a stellar start to the year," said Raki Phillips, CEO of the Ras Al Khaimah Tourism Development Authority. "We were gearing up for a great Easter and Eid break, and then we were hit very bad in mid-March. Some hotels had to be closed, and some were turned into quarantine zones. Our biggest focus right now has been on recovery."
Phillips was quick to note that the hotel industry is very resilient. "We knew that we would bounce back, and we worked on several stimulus packages to protect employees and businesses. Right now, we have started to see a great uptake. We still have the social distancing measures in place because of the space and capacity at hotels."
"The only thing that we are focused on is not dropping average rates at our hotels because there is limited demand out there. Visitors will come since RAK is a popular 'shortcation' spot. There is no need for hotels to panic and drop their average rates," he cautioned.
Leisure to pick up before corporate travel
Simon Casson, president of Hotel Operations, EMEA region, Four Seasons, described the impact of the pandemic as deep and long running.
"We had to close 80 per cent of the hotels in the region," he said. "But, we are seeing some of them reopen now. Certain products will bounce back sooner such as individual guest villas and private chalets. Leisure will come back before corporate, and space is going to be a vital commodity as hotels reopen."
Tim Cordon, area senior vice president, Radisson Hotel Group, added that third party accreditation will be very important in terms of gaining trust, especially for hotels that rely on corporate and business travel. "Businesses that are sending their employees out of the country for work-related travel have to assure the safety of their employees. For this, we are working closely with airlines and the WTTC to establish a consistent response. We need to take advice from experts on how we can safely open our hotels."
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