Business travel ready to take off

Recent spending in infrastructure and improved flight connections will help the region to attract travellers, says report.

The Middle East's investment in infrastructure and improved flight connections will help the region to grow its business-travel sector, according to a new report. The region has been hit harder than expected, but "the market is well-placed to emerge stronger than ever from the current downturn", Hogg Robinson Group (HRG), the international corporate travel services company, said in a report.

"Continued investment in infrastructure, a varied and high-quality hotel offering and an emerging reputation as a hub for international business mean that the Middle East is well-placed to emerge from the recession as a leading corporate-travel destination," said Iain Andrew, the divisional senior vice president at Dnata Travel Services. Europe was the main source of corporate travel to the Middle East, according to the report.

This reflected "the excellent flight connections that make it an increasingly important and accessible destination", HRG said. "However, there has also been a marked growth in demand from India, China and South America, highlighting the region's growing importance as an international business centre." Most Middle East destinations, along with other regions, have posted declines in hotel room rates and occupancies this year as global demand has declined. The region saw a 17.7 per cent fall in revenue per available room in the first seven months of the year compared with the same period last year, according to data from STR Global.

HRG said that many corporate travellers were switching to online booking services, which helped them to find the cheapest deals. Continued investment in hotels and an increase in options was also helping to balance out the region's expensive hotel rates, especially as more budget brands entered the market, HRG said. "This has created a new benchmark for 'value for money' in the Middle East and means that corporate travellers are well-placed to negotiate better rates. The notable exception is Abu Dhabi, which is reflecting trends previously seen in Dubai: supply is still struggling to keep pace with demand."

Abu Dhabi is the second-most expensive destination in the world for business travellers and could be set to take the number one spot from Moscow, according to a survey from HRG last month. There has also been a growing trend to combine business and leisure over recent months in the Middle East, the latest survey said. "This is particularly evident in Dubai, where significant investment in leisure infrastructure to help diversify the country's economy is paying dividends," it said. "We expect this trend to continue as companies seek to maximise value from their travel spend."