UAE hospitality industry to sustain growth

Dubai - Leading industry players optimistic for 2016 despite global challenges

The UAE hospitality industry will sustain a steady upward growth trend this year despite a slowdown in global economies and a bearish oil market, experts said.
Senior executives from leading hospitality groups agreed that the industry outlook has slightly weakened in recent months due to the geopolitical situation and volatile oil prices.
However, they said it is a temporary phase and the hospitality industry will bounce back strongly in the second half of 2016.
"We are optimistic for 2016 despite the current economic situation in the Abu Dhabi and Dubai markets," Ahmed Margoushy, general manager, Danat Al Ain Resort, told Khaleej Times.
He said the group has experienced slow business movement, especially in the oil and gas sector, which has a bearing on the hospitality business.
"We are looking forward for better figures in 2016. We expect more business from other segments such as MICE, leisure and sports which will compensate the slow pick up from the oil and gas industry," he said.
"We are also planning to have more presence outside the UAE and focus more on Saudi Arabia, Oman and Qatar to maximise our share from these markets," he said.
UAE safest place
Moussa El Hayek, chief operating officer at Al Bustan Centre and Residence, said the hospitality industry outlook has weakened due to falling oil prices combined with the economic and political unrest in neighbouring countries. This led to a slowdown of tourist influx into the UAE, especially from feeder markets such as Russia, Far East and the Middle East.
"Even the presence of European visitors is less likely felt in the region. Yet, with the continuous efforts of the Dubai tourism and the hospitality industry, we expect to perform better when it comes to attracting tourists to come and visit the UAE," he said.
He said the UAE is still one of the safest places in the world for tourists, businessmen and foreign investors, who are looking to advance their assets and properties. He said Al Bustan Centre and Residence is a growing business in hospitality over decades. However, the property has not set plans for business expansion at this stage.
"We are proud of our preparedness when it comes to setting an emergency action plan by cutting down on expenses from different department expenditures, especially when there is an economic downturn," he said.
UAE economy resilient
Kevin Lawless, hotel manager, Danat Jebel Dhanna Resort, said 2015 was an excellent year for the property and a similar performance is expected in 2016 despite a challenging business environment.
"We maintained occupancies in the high 90s in 2015. This year, we will be looking to drive even higher average daily rates [ADR] while maintaining occupancy," he said.
Elaborating, he said the resort is very strategically located and caters to clients in the ongoing oil and gas projects, the nuclear plant being developed in Baraka and the Etihad Rail network to name a few.
"Our resort also attracts many leisure guests [local and overseas] that are looking to get away from the hustle and bustle of city life, with one of the main attractions being our 800-metre beach where guests can walk into around 100 metres."
To a question, he said this is not the first time when oil prices have fallen or there has been a slowdown in the economy.
"The UAE, as the rest of the world, has been faced with this challenge and looking back at similar times, we always bounce back fast, thanks to the vision and strategy of the TCA Abu Dhabi in particular."
He said the resort is adding 24 one-bedroom beachfront chalets. "The project is already under way and we are looking to have them on the market by the end of this year. Dhafra Beach Hotel located adjacent to Danat Jebel Dhanna Resort is also managed by Danat Hotels and Resort will be adding another 100 keys to its inventory. This project will commence by the end of 2016. Cutting down staff is not something we have had to consider."
Steady tourist numbers
Khaled Sharabassy, general manager at Tilal Liwa Hotel, said the hotel sector is expected to grow this year.
"We are expecting an increase of 10 per cent from last year's figures," he said, adding that the hotel is managing expenses better and looking at new business options with attractive rates and packages.
"We are expanding our property adding villas and more recreational facilities," he said.
Nives Deininger, director of sales at Golden Sands Hotel Apartments, said the number of tourists travelling to Dubai is steady, especially during the peak months. She said low oil prices and the global economic slowdown have had an impact, however tourism growth is expected to remain steady this year.
"We are looking to maintain similar targets as 2015, focusing on strengthening business relationships. We plan to maintain the same staff levels, ensuring to consistently exceed, if not meet, guest expectations."
Exciting year ahead
Abdulla Al Shammar, general manager, First Central Hotel Apartments, said the hospitality industry will face a challenging yet exciting year ahead.
"With a lot of budding hotels coming into healthy competition, it comes down to who can provide high quality service and competitive rates. Room occupancy could experience a marginal drop compared to last year on the low periods," Al Shammar told Khaleej Times.
To a question, he ruled out any downsizing in staff numbers and said Central Hotels plans to expand its reach to The Palm Jumeirah and Business Bay.
Kamal Zayati, general manager at Al Raha Beach Hotel, said 2016 seems to be a challenging year.
"We are looking at marginal growth this year compared to 2015 considering the economic and political environment in the Middle East. The hotel will continue its focus on markets, including the UAE, Germany and UK as well as target MICE, GCC leisure and football association to achieve budgets.
"We are looking at maintaining our business with marginal increase from different segments. With no plans to cut down staff at this stage, we have only frozen new recruitment. We will focus on controlling expenditure, mainly utility, which is part of our drive for environment protection and reducing carbon footprint," Zayati concluded.
- muzaffarrizvi@khaleejtimes.com