$3.39 trillion to be Invested in Mid East Hotels and Tourism by 2020
The Middle East Hotel Outlook 2020, an update of the groundbreaking Global Futures and Foresight (GFF) research study on the Future of Travel and Tourism in the Middle East, was unveiled during The Hotel Show, today.
According to the study, which covers 13 Middle Eastern countries, over US$3.39 trillion will be invested in regional hotels and supporting infrastructure by 2020. The study, which is taking a 'futures' perspective on the trends and drivers shaping travel and tourism in the region to 2020 and beyond has identified plans to add at least 750,000 hotel rooms to the hospitality landscape from Egypt to Iran. They found projected construction costs for the most recent announcements from over 30 developers, investors and operators vary from US$100,000 to US$2.3m per room.
"The research draws on a range of methods to explore potential scenarios, challenges and opportunities for regional travel and tourism and provides practical advice on how players in the sector can factor these insights into their planning," said Rohit Talwar, Joint CEO of GFF and co-author of the study.
The study has three main deliverables - the Pathfinder Report launched on May 1st 2007, a full study report to be launched in November 2007 and a 'Response from the Region' to be launched in summer 2008. This latest update analyses some of the most recent key hotel project developments announced since completing the research for the Pathfinder Report. The research highlights five key emerging strategic challenges for the hotel sector - managing the risk of overcapacity, direct action to address resource shortages, differentiation, innovation and reducing the growing environmental impact of the hotel sector.
"A concerted effort is required if key environmental issues are to be addressed. Industry players must drive down the consumption of resources and the generation of waste and emissions throughout the lifecycle of a hotel from construction to operation. With so many new developments underway, the region is in a position to leapfrog existing standards and establish global environmental best practices in the construction and operation of these new hotels," added Talwar.
"Correctly analysing demand cycles both at the macro and micro levels is essential for the sake of national economies and for individual operators. Hotel and tourism players need to start modelling different possible future scenarios to understand the levels of demand required to meet targets for revenue per available room (RevPAR) and to help develop strategies for overcoming any weakness in demand or potential overcapacity," said David Smith, GFF Joint Chief Executive and co-author of the report.
"In our experience, such scenarios help an organisation 'rehearse the future' and prepare for a range of possibilities," added Smith.
"Given the scale of likely human resource demand and the competition from around the world for the best service talent, regional hotel owners and operators need to take a long term perspective and think strategically about how as an industry they will cultivate sufficient staff from around the world to meet future demand, " said Talwar. He went to add that "recently the World Travel and Tourism Council forecast that 1.5 million extra jobs would be created in the sector, but we now estimate that with the new announcements, the figure could be closer to 2 - 2.5 million. This may be an opportunity for collective action by the industry to invest in primary, secondary and tertiary education of future hotel staff in different locations around the world."
The study highlights that with so many high end properties coming to market, guests and their travel agents will have a wide range of options to select from. The challenge for operators will be to differentiate their proposition, both in terms of brand positioning and in their service delivery so as to maximise on the strongest form of advertising, 'word of mouth' recommendation.
'Research studies such as this are invaluable to the sustainable growth of the hospitality industry. The region is already setting international standards for innovation in the new developments planned and those already underway. As the report suggests, the challenge will be to keep innovating but also to continuously drive industry best practice to new levels,' said Bernard Walsh, Managing Director, dmg world media dubai Ltd.
The Hotel Show 2007 is taking place at the Dubai International Exhibition Centre (DIEC) until Tuesday 5th June. (MenaFN.com)
According to the study, which covers 13 Middle Eastern countries, over US$3.39 trillion will be invested in regional hotels and supporting infrastructure by 2020. The study, which is taking a 'futures' perspective on the trends and drivers shaping travel and tourism in the region to 2020 and beyond has identified plans to add at least 750,000 hotel rooms to the hospitality landscape from Egypt to Iran. They found projected construction costs for the most recent announcements from over 30 developers, investors and operators vary from US$100,000 to US$2.3m per room.
"The research draws on a range of methods to explore potential scenarios, challenges and opportunities for regional travel and tourism and provides practical advice on how players in the sector can factor these insights into their planning," said Rohit Talwar, Joint CEO of GFF and co-author of the study.
The study has three main deliverables - the Pathfinder Report launched on May 1st 2007, a full study report to be launched in November 2007 and a 'Response from the Region' to be launched in summer 2008. This latest update analyses some of the most recent key hotel project developments announced since completing the research for the Pathfinder Report. The research highlights five key emerging strategic challenges for the hotel sector - managing the risk of overcapacity, direct action to address resource shortages, differentiation, innovation and reducing the growing environmental impact of the hotel sector.
"A concerted effort is required if key environmental issues are to be addressed. Industry players must drive down the consumption of resources and the generation of waste and emissions throughout the lifecycle of a hotel from construction to operation. With so many new developments underway, the region is in a position to leapfrog existing standards and establish global environmental best practices in the construction and operation of these new hotels," added Talwar.
"Correctly analysing demand cycles both at the macro and micro levels is essential for the sake of national economies and for individual operators. Hotel and tourism players need to start modelling different possible future scenarios to understand the levels of demand required to meet targets for revenue per available room (RevPAR) and to help develop strategies for overcoming any weakness in demand or potential overcapacity," said David Smith, GFF Joint Chief Executive and co-author of the report.
"In our experience, such scenarios help an organisation 'rehearse the future' and prepare for a range of possibilities," added Smith.
"Given the scale of likely human resource demand and the competition from around the world for the best service talent, regional hotel owners and operators need to take a long term perspective and think strategically about how as an industry they will cultivate sufficient staff from around the world to meet future demand, " said Talwar. He went to add that "recently the World Travel and Tourism Council forecast that 1.5 million extra jobs would be created in the sector, but we now estimate that with the new announcements, the figure could be closer to 2 - 2.5 million. This may be an opportunity for collective action by the industry to invest in primary, secondary and tertiary education of future hotel staff in different locations around the world."
The study highlights that with so many high end properties coming to market, guests and their travel agents will have a wide range of options to select from. The challenge for operators will be to differentiate their proposition, both in terms of brand positioning and in their service delivery so as to maximise on the strongest form of advertising, 'word of mouth' recommendation.
'Research studies such as this are invaluable to the sustainable growth of the hospitality industry. The region is already setting international standards for innovation in the new developments planned and those already underway. As the report suggests, the challenge will be to keep innovating but also to continuously drive industry best practice to new levels,' said Bernard Walsh, Managing Director, dmg world media dubai Ltd.
The Hotel Show 2007 is taking place at the Dubai International Exhibition Centre (DIEC) until Tuesday 5th June. (MenaFN.com)
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