The Middle Eastern hospitality market has definitely experienced a growth spurt in terms of hotel supply, yet has continued to battle with the downward pressure on average daily rates (ADR) and revenue per available room (RevPAR).

In 2018, the UAE alone opened 2,500 keys by Q3 with 98% of the openings in Dubai. Saudi Arabia, as of Q3, has a supply of 49,760 keys, Egypt, which is experiencing a positive turnaround in tourism, currently has a supply of 78,200 hotels keys. Other major capital cities in the region like Kuwait City, Muscat, Manama and Amman now offer 23,700 keys combined as of Q3.

However, with the changing landscape of the incoming source markets such as China and India, properties have had to contend with the growing number of price-sensitive visitors and have had to continue to face rate compression in most markets, according to Colliers International.

In the annual GM Survey 2018, Hotelier Middle East reached out to general managers working in the region to ask their take on the current hospitality situation. While almost all participants agreed on the growing concern regarding supply, they remain positive on the outcomes in the coming years. As a matter of fact, 44.74% of the respondents experienced a slightly higher occupancy rate in 2018 than in 2017, 7.89% reported a significantly higher occupancy statistics while 31.58% notes the same levels as last year with the rest experiencing slightly lower or significantly lower.

With room rates, on the other hand, general managers have had mixed experiences. 17.95% of the participants experienced significantly lower rates compared to 2017, 28.21%, while  25.64% experienced no change, 23.08% reported slightly better performance from 2017 while only 5.13 stated significantly higher room rates in 2018.

According to Colliers International head of hotels Christopher Lund, to succeed in this competitive market, general managers have to think out of the box.

“The increase in competition with the continuous opening of new hotels is the primary concern for GMs in the region. They must ensure their property stands out and delivers high-quality service to secure bookings and maintain an adequate cash flow,” Lund says.

When asked what factors general managers consider most important for the success of the hotel, 70% of the respondents said branding of the property was pivotal for long-term positive outcome. 62.55% stated location as a necessity for success. General managers in the survey also pointed out loyalty programmes as a factor followed by value for money for the guests, luxury or personalised services as focus points for hotels in the region.

Al Bustan Centre and Residence chief operating officer Moussa El Hayek notes that general managers should also pay attention to changing trends in the region: “In the hospitality industry, GMs always face a multitude of challenges, considering business demand and strong competition as a lot of new hotels are being opened from time to time. Capitalising on branding alone will not suffice but maintaining good customer service and up -to-standards quality is more important. Trends are reshaping the industry and so are the preferences of the clientele that’s why continuous development of products and services is a must these days.”

Nayla Chowdhury, general manager at the world’s largest Hampton by Hilton Dubai Airport, says it’s also important for GMs to have a “sound strategy in place”. “Dubai is a very dynamic market and as GMs the focus is always to ensure that you maximise the revenue potential for your property. Therefore you need to consistently keep your eye on the ball and have a sound strategy in place to reach your target.”

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