Tourism must ready in case of downturn

Amena Bakr The tourism industry will likely need to adopt new strategies to cope with a possible downturn in travel, an industry executive has warned. The changes will include financial support for hard-hit travel agents, seeking out new customers in growth regions such as Asia and a growing emphasis on segments of the industry that are less dependent on leisure travel. "Until now the real problem is hitting the European and American markets, but that means that hotels here have to have a precautionary plan to support the industry," said Tarek Lotfy, the regional revenue director of the MENA region at Golden Tulip, a Dutch-Swiss hospitality group.

The Middle East has been one of the brightest growth stories of tourism industry in recent years. Last year, the Middle East recorded the largest percentage increase, surging 13 per cent to 46 million arrivals, followed by the Asia-Pacific region, which grew 10 per cent, and Africa with eight per cent growth, the UN World Travel Association (UNWTA) said in its annual report. The Middle East "continues to be one of the tourism success stories of the decade so far, despite ongoing tensions and threats," the report said.

Yet much of that growth has been built on travellers from the developed economies of the US and especially Europe. Both regions are expected to be particularly affected by the economic slowdown. Hoteliers and other industry officials said the global economic turmoil presented a challenge, but they remained confident. Mr Lotfy said the industry would need to take a long view. This would include financial support for travel agents who needed to funnel tourists to the region once an economic turnaround began. "As the economic slowdown continues, the number of leisure travellers will decrease and so travel agencies will be hit the worst. That's why hotels will have to become more flexible and finance the agents," he said.

Shifting the focus from leisure tourism to more business-orientated travellers could also help if the economic slowdown in the West prompted businesses to aim for expansion in relatively better performing regions such as the Middle East and Africa. This could help create "a massive increase in business tourism in the region, especially in the meetings, incentives, conventions and exhibitions segment of tourism", Mr Lotfy said.

Golden Tulip Hotels, Inns and Resorts has 194 hotel franchises worldwide and manages 60 hotels located in Morocco, Ghana, Middle East, UK, Germany, Austria and the Netherlands. "In the coming period the most sensible thing to do is to focus on corporate tourism, but at the same time we are aware that this is only a cycle and will pass just as terrorism threats and wars did," he said. The Golden Tulip, which operates mostly four-star properties under its three brands, Royal Tulip, Golden Tulip and Tulip Inn, is aiming to have 55 hotels - up from 35 - in the region by 2010, under its three-star Tulip Inn and four-star Golden Tulip brands. Amine Moukarzel, the senior vice president and managing director of Golden Tulip Hotels in the MENA region, said earlier this year: "From here till 2010, our aim is to open a hotel in the region every month."

Habib Khan, the chief executive officer of the hospitality division at Planet Group, based in Dubai, is trying a different approach. "We have three operating hotels in Dubai and 60 per cent of our business is from leisure tourism and we are aware that when disposable income shrinks so will our business. So instead of moving to the business segment, we will shift our focus from the European markets to countries like India, China and Pakistan where economic slowdown is less evident."

Mr Khan sees the drop in prices as an incentive for his newly targeted markets. "People in Asian markets have always waited till our hotels were at the low season before they travel, so when prices are reduced they will be encouraged to come here more often." Darroch Crawford, the managing director in the Middle East of the UK budget hotel chain Premier Inn said: "I know this might sound a bit bizarre but at times when an economy goes into recession budget hotels gain business because they offer value for less money."

@Email:[e-mail]