Investments in the region's tourism industry over the past decade will help the hotel sector recover faster from the economic downturn than other regions, according to Deloitte Middle East. Growth in budget and premium options in the industry would also help cushion the region from the impact of the slowdown in global tourism, said Robert O'Hanlon, the tourism, hospitality and leisure partner at Deloitte Middle East. In particular, Mr O'Hanlon said there was enormous potential for the budget sector, especially with the introduction of the Dubai Government's budget airline flydubai, with flights due to start on June 1.
"As the market matures, the recognition that there's actually also a market for mid-range and budget products comes through," said Mr O'Hanlon. "We've seen that happen with the Middle East and as we see things happen like the take-up of the budget airline, that will also feed the mid-market and budget hotels. "Gulf countries have signalled they are willing to invest in long-term, sustainable tourism developments which appeal to a global audience."
Figures show the Middle East hotel industry was buoyed by an 11.3 per cent increase in visitors last year, with revenue per available room increasing 18.3 per cent to average out at US$148 (Dh543). "The region's underlying wealth and the appreciation of quality ensure there will always be a call for premium accommodation, while mid-market and budget operators are well placed to gain ground over competitors if current economic conditions persist beyond 2009," Mr O'Hanlon said.
Accor Hospitality has indicated it is pushing ahead with its expansion plans in the region. Accor has 27 hotels in the Middle East and another 41 hotels under development. These are expected to be completed by 2012 or 2013. Christophe Landais, the managing director at Accor, agreed there was a strong need for more budget hotels in the Middle East, particularly in Dubai. "We have reached the situation where, effectively, on the five-star, Dubai is very much saturated," he said. "Since the crisis, we can hear that a lot of development on a five-star level has been dropped or delayed. There is a need for mid-scale and economy lodging."
Accor recently opened another Ibis, which is its budget brand, in Al Barsha, its third in Dubai. Another Ibis is scheduled to open next month at Mall of the Emirates, which will bring Accor's budget room count in Dubai to 1,259. rbundhun@thenational.ae
