The hospitality sector’s revenues in the GCC region will reach a pre-pandemic level this year, driven by the return of international tourists coupled with mega events such as Expo 2020 Dubai and Fifa World Cup in Qatar, says a report released on Wednesday.
According to Alpen Capital’s latest report, hotel revenues across the Gulf region will expand 74.8 per cent to $26.3 billion (Dh 96.5 billion) this year.
Expo 2020 Dubai, which concluded on March 31, 2022, attracted more than 24 million visits with a large of foreigners flocking to Dubai during the six-month-long event. Similarly, Fifa World Cup is also projected to attract a lot of international visitors to Qatar and Dubai.
Sameena Ahmad, managing director, Alpen Capital, said the pandemic has accelerated the adoption of technology and digitisation for operators looking to streamline procedures as well as improve the overall level of customer experience. “The demand for mid-scale hotels, service apartments and Airbnb’s is also on the rise as it offers flexibility and affordability,” she said.
Going forward, industry analysts say that ease of visa regulations by the UAE will further support local hospitality and tourism sectors.
The Alpen Capital study projected that the revenues are forecasted to grow at a pace of 6.6 per cent compound annual growth rate (CAGR) between 2022 and 2026 to reach $34 billion on the back of economic recovery, increase in tourist arrivals along with innovative solutions being offered by the operators are primary drivers of growth for the industry.
The largest markets in the GCC – Saudi Arabia and UAE – are expected to witness CAGRs of eight per cent and 5.5 per cent, respectively. Kuwait, Oman and Bahrain are expected to grow at 7.1 per cent, 6.3 per cent and 2.9 per cent, respectively. Whereas growth in Qatar is expected to normalise post the completion of the Fifa World Cup 2022 with a CAGR of 4.3 per cent between 2023-2026.
Alpen Capital expects the average occupancy rate across the GCC is forecasted to rise from 57 per cent in 2022 to 62 per cent in 2026. While the average daily rate is forecasted to increase from $145 this year to $151 in 2026, whilst revenue per available room is expected to increase from $83 to $93, an annualised growth rate of 1.1 per cent and 2.9 per cent, respectively.
The study revealed that the Gulf region is witnessing rising demand for mid-scale brands and serviced apartments, hence, major hotel operators are increasingly focusing on establishing mid-scale brands as they foresee growth and potential to diversify their hotel portfolio amid rising demand for such properties.