UAE hospitality sector looks to a brighter future

The recovery speed of the hospitality industry will be determined by the vaccine and its availability
The recovery speed of the hospitality industry will be determined by the vaccine and its availability

Dubai - Various actions are needed to help the UAE’s hotel industry survive the impact of the Covid-19 pandemic, experts said



by

Rohma Sadaqat

Published: Wed 23 Dec 2020, 4:25 PM

While recovery may be slow, hospitality experts in the UAE are placing their confidence and futures in the Covid-19 vaccine, and travellers looking to put their holiday plans back on track.

Tim Cordon, senior area vice president for the Middle East & Africa at Radisson Hotel Group, said that it is no secret that the hospitality industry has been placed in an incredibly vulnerable position. “But, within that sobering reality, it is important to be resilient but also flexible, nimble and open-minded. With no doubt there will be several long term changes to how the travel and hospitality industries will function and interact moving forward.”

Another key aspect to consider, he said, is how travellers and guests themselves will ultimately evolve with regards to their behaviors, expectations and preferences. “The hospitality industry has survived countless challenges and periods of economic downturn, and Covid-19 will be no exception. In times like these, we need to plan for the future, inspire our teams and remind them that there will be an end to this crisis, and that the hospitality industry will come back stronger than ever. Those who understand the new definition of normal, adapt and respond, will be able to benefit from these new opportunities.”

“We are confident that travel will continue to rebound, and more capital will be invested in the industry from both the private and public sectors,” Cordon added. “While the recovery speed of the hospitality industry will be determined by the vaccine, and will be different based on the countries and areas around the world, many countries in Middle East have already started to see a recovery in the fourth quarter of 2020, be it from the domestic or international market. Once the vaccine becomes available, this will significantly improve our industry’s performance, and until then we need to remain optimistic and positive, listen to our team, be flexible, and make decisions quickly.”

A new report from the UAE Hospitality Think Tank – a focus group comprising of experts from across the UAE hospitality sector brought together by Mashreq Bank and MEED – recommended various actions needed to help the UAE’s hotel industry survive the impact of the Covid-19 pandemic. The report acknowledges that while government authorities were quick to act in providing support to hoteliers as the effects of the pandemic progressed, further support is needed to facilitate recovery.

The recommendations cover both the immediate need of boosting an industry impacted by the current crisis, and the longer-term objective of building resilience through increased collaboration and efficiency.

According to the report, the charges for financing can be quite expensive for hotels, damaging their short-term survival prospects. Banks must therefore provide flexibility on key terms for facilities. The government might also provide a 25 to 50 per cent subsidy for staff accommodation costs and employment permits, as well as waive visa charges as a result of the high, ongoing accommodation and food costs associated with staff who are unable to return home. Taxes, including municipality and VAT should also be temporarily waived, and non-essential security enhancements should also be suspended.

“The regional hospitality sector already faces multiple headwinds, and the pandemic has only further impacted the industry with factors such as the global economic environment, low oil prices, struggling tourist numbers and oversupply,” said Joel Van Dusen, head of Corporate and Investment Banking Group at Mashreq Bank. “Only by creating a permanent shift in the way business is done, will the hospitality industry be able to create a strong momentum during the medium term.”

rohma@khaleejtimes.com


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