REPORT: Hotelier GM Survey 2015

Find out what obstacles and opportunities this region's general managers are facing

MICE facilities are among the top three success factors for 23% of respondents.
MICE facilities are among the top three success factors for 23% of respondents.

The Hotelier Middle East GM Survey returns to present a snapshot of the challenges and success stories that general managers in the region are facing. Here are the highlights...


With the number of hotels opening in the market, and the reappearance of Iran on the international market, the issue of oversupply in the hospitality industry has reared its head. More than half (56%) of the GMs surveyed said there is too much supply for current levels of demand, while only 17% said supply was insufficient.

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The GMs were asked to reveal the biggest challenge for their property in the next year, and the imbalance of supply featured heavily in their responses. One GM from the UAE said: “Over supply of rooms is putting extreme pressure on rates.” Another warned of a “rate war”.

At The Hotel Show, Deloitte head of real estate Martin Cooper said: “Currently we have a scenario where supply is outpacing demand by around 2%. This is because of the projects under construction that are nearing handover and beginning operations.”

Many GMs said maintaining, or even improving, ADR will be a stiff challenge. The competition is raging, and 79% of respondents added that increased competition will be one of the biggest issues affecting the property’s performance in 2016.

In fact, STR Global’s preliminary data for the month of September in Dubai shows that hotels in the Emirate are set to post decreases in revenues and rates. It also revealed increases in supply (up 5.4%) running ahead of demand (up 5.1%). STR Global said supply growth in Dubai remains significant. Through the first eight months of 2015, supply growth (up 6.3%) outstripped demand growth (up 5.2%) in the market.


With many new openings in the market, recruitment is another concern. One of the respondents said: “The lack of talent in the market and rising inflation will make it tough to offer the service standards needed to dominate the market.” Another general manager warned of a “salary war”.

When respondents were asked whether pay rates at their hotels are sufficient to retain talented staff, the answers were not heartening. Only 22% said they were.

The issue of staff recruitment, retention and training was named by GMs as the second biggest issue that would affect their properties’ performance over the next 12 months and one of the most challenging aspects of their roles as general managers. One GM said: “To retain and motivate staff [is a challenge] as competition is tough, and I am not able to tweak the salary scale.”


But it’s not all doom and gloom. There are plenty of opportunities to be had in the current market — if the GMs can reach out and take them. Corporate business was cited by a majority of the GMs as one of the biggest markets to capitalise on. Some 87% of the respondents said less than one fifth of their total sales come from business groups including MICE – which they are clearly looking to increase. While it makes up a significant proportion of current traveller numbers across the Middle East, and especially in the UAE, the region’s MICE business remains significantly underdeveloped compared to more mature markets around the world.

A report published early this year by Strategy& — part of professional service network PwC — noted that most MICE events are still held in North America and Europe. Only 2% take place in the Middle East.

“There is a large share of MICE business just waiting to come to emerging markets, including the GCC, if these countries improve their tactics and their position in the meetings market,” it added.


Overall, GMs do love their job — 87.5% said they would choose the hospitality industry if they had their time again. The development of their teams and interacting with guests were the favourite aspects of the role.

One GM summed it up perfectly: “This is not a job, it is a lifestyle.”

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