Explainer: Has the UAE’s hospitality sector recovered from the Covid-19 pandemic?

Has the UAE hospitality sector bounced back from the pandemic?
The UAE continues to dominate the Middle Eastern travel market with its supply and bookings across all travel segments, and this will continue to see aggressive growth as Expo 2020 opens in October. After the challenging times of the pandemic, the Expo is a welcome opportunity for those of us in the hospitality industry, and we are already seeing the benefits of this event in the wider economy. This is encouraging after so many months of hardship.

How much of an impact will Expo 2020 have on the sector?
The Expo is a huge opportunity for us, and especially a welcome event after the difficult months of 2020. There is a renewed optimism around the event, which in turn is spurring more growth across the UAE economy.

The hospitality sector is one small part of the Expo ecosystem but the event is fueling medium- and longterm growth within the sector. According to the latest forecast from the hospitality-industry data provider STR, Dubai hotel occupancy will rise by an astonishing 77 per cent year-on-year in Q4, with revenue per available room rising by an even stronger 86 per cent.

Room supply is also expected to grow by 3.6 per cent year-on-year in Q4. The uplift that the event provides will resonate across the UAE, with hotel occupancy expected to rise in Abu Dhabi as well as Dubai. Across the sector, we are getting Expo ready, launching services, repurposing facilities and catering to different tastes and palettes. At IHG Hotels, we are creating Expo 2020 passports for kids and organising specialised amenities and food menus that cater to all nationalities.

Have guest expectations changed for the longer-term?
The Covid-19 pandemic has marked the most difficult period in the hospitality industry’s history, with significant social and economic disruption, and has also led to changes in consumer behaviour.

Our guests still value and cherish our services and tailored experiences, but at the same time, we are seeing renewed emphasis on health, wellness as well as a flexibility in cancellation terms and conditions.

Looking ahead, where do you see greater demand in the GCC – luxury or midscale?
The Middle East, long viewed as a travel destination synonymous with luxury, is specifically positioned to ride a rising tide of recovery in the luxury travel and tourism sector, owing to the rebound in air passenger traffic in 2021 and the strength of the existing demand for domestic style ‘staycations’. The pandemic may have affected the travel and tourism industry worldwide, but the sector is also one of the few that has the potential to recover quickly. Millions of people around the globe have set luxury travel as a near-term goal and with many Middle Eastern countries opening up to tourists, it’s fast becoming one of the few safe luxury travel destinations around the world.

Having said that, the market is diversifying as the region promotes itself to a wider base of travellers and new source markets. This has resulted in an upturn in demand across different segments of accommodation including midscale, upscale and luxury hotels. There is also the rise of alternate types of branded accommodation such as micro hotels and design-led lifestyle hotels that provide guests with unique experiences.

How can operators ensure they remain competitive – especially with the rise of Airbnb and other such platforms?
There is space within the sector for traditional operators as well as alternative concepts like Airbnb and HomeAway, as our propositions are different. For example, with events such as Expo, there will be a definitive stress on business amenities and services, and this is something we will double-down on over the next few months. For large groups, such as national contingents, a hotel offers more flexibility and ease and a better network of suppliers for tours, meetings and leisure experiences.

There will always be new players in the hospitality industry, and this is something we welcome as it keeps us constantly innovating. Although technology has taken hospitality out of the realm of hotels and introduced new players like Airbnb, it has also helped us streamline and tailor our services.

Lastly, what are the future trends set to reshape the regional hospitality landscape?
Technology will continue to impact the way we travel and stay in hotels. For guests, the brand proposition is as much about the booking experience, marketing, and app functionality, as it is about the hotel destination and hallmarks. For owners, our offering is as much about our ability to create revenue advantages through data and technology, as it is about our scale and expertise.

In response to the challenges of Covid-19, we have used our investment in cloud-based technology to accelerate the rollout of digital enhancements that support safe and secure guest experiences and reduce unnecessary contact. This includes applying QR code menus in all our F&B establishments, the global rollout of mobile check in/check out and piloting other mobile-enabled improvements such as inroom dining orders and real-time Pay-With-Points.