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The Long Road to Recovery: Will the resilient hospitality sector rebound?

Filed on August 27, 2020
Shubhojit Mahalanobis, General Manager, Danube Hospitality Solutions

There is no doubt that the Covid-19 has dished out a severe beating to the hospitality industry worldwide. The pernicious economic impact of global travel restrictions and commercially debilitating intermittent spells of lockdowns managed to cast a pall over near-term global economic outlook. Things couldn't have been different for the UAE as well, but a well-coordinated and timely government response to a health-emergency has averted the crisis. What has emerged from this is something which has given much-needed "wings" to the proverbial "bird of hope" to the hospitality industry in the UAE.
So the big question is this: are there any positive signs emerging on the horizon for the hospitality industry? The simple and short answer is a resounding "YES". What are those signs?

. On July 8, 2020, Dubai saw its aggressive testing and sanitisation efforts, which covered hotels, malls, airports, roads, and parks, bore fruit and played a major role in allowing the government to announce the much-anticipated reopening of the economy and the resumption of International flights for tourists. The UAE, known for its high-end hotels, world's tallest building, and balmy beaches, has invested heavily in health and safety measures and feels absolutely ready to flaunt its new-found credentials of being a safe and attractive destination for tourists across the world.


. The much-anticipated resumption of normal working hours and reopening of the economy is a positive step towards a long and arduous road to economic recovery. It seems highly likely that the UAE will be the first country in the Middle East to emerge from the Covid-19 situation stronger and better than before. The National Emergency Crisis and Disaster Management Authority have issued a new 21-point health and hygiene measures and protocols for the Hospitality Industry, which must be strictly adhered to so much so the customers feel absolutely safe going into any hotel within the UAE.


. After a temporary drop in occupancy level during the lockdown months, July 2020 witnessed some considerable improvement in occupancy rates especially in the economy rooms - another green signal was seen in the surge in demand for luxury serviced apartments and holiday homes.


. A major chunk of current and future business growth is forecasted to come from domestic tourism and the expected rise in staycations.


. The announcement of Indian Premier League 2020 - one of the world's most prestigious cricking tournaments - to be held in the UAE is a confidence-boosting event especially for local and international tourists to feel absolutely safe about visiting the country.

. The Expo 2020 will cause a dramatic uptick in the tourists visiting the UAE in 2021, which would positively impact the retail, hospitality, and construction industries.

. Dubai Land Department has made a major announcement in the shape of "Fractional Title Deed" with an express aim to boost small-scale investment in the hotel apartment segments. This would provide smaller investors with an exciting opportunity to invest in the hospitality sector of the UAE - which is forecasted to double in size by 2027 - and inject much needed investments to the hospitality sector.

. In order to encourage international tourists to travel to the UAE, Emirates has announced a landmark programme to offer free global cover for Covid-19 health expenses and quarantine costs. Now people will be able to travel with a peace of mind that the global cover offered by the airliner will cover expenses up to 1.5 million Euros.

. As the travel restrictions around the globe ease up, the hospitality industry will experience a lot of "pent-up demand for travel" from local and international travelers. Predicting the future is surely a task fraught with many questions. But the resilience of the UAE's hospitality industry cannot be simply brushed aside. It has a history of strong and sustainable before the COVID happen. So it is not a question of will or it will not bounce back; it is a question of when. The recovery is on the horizon.

As the markets have started to open up, there has been a spate of positive signals emerging from every nook and cranny. With the right mindsets guiding and overseeing the developments in the UAE, the travel and tourism industry is on the right trajectory to make a rebound.

 


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