The next 12 months will be a testing time for the GCC hotel industry, with owners and operators facing challenges on multiple fronts, according to Simon Allison, organizer of this year’s Gulf and Indian Ocean Hotel Investors’ Summit, which will take place from 14-16 November at the Al Hamra Convention Centre and Waldorf Astoria, Ras Al Khaimah.
The GIOHIS summit – now in its fifth year – provides support and guidance to delegates via a transparent and compact industry forum, with debate on all aspects of the industry, as well as discussion about innovations and best practices.
Key speakers include: Alison Grinnell, CEO, RAK Hospitality Holding LLC; Abdullah Abdooli, CEO, Marjan Properties; Raki Phillips, CEO RAK Tourism Development Authority; Dillip Rajakarier, CEO, Minor Hotel Group; Rami Moukarzel, Head of Hospitality Development and Strategy, Louvre Hotels Group; Olivier Harnisch, Member of the Board of Directors, Gulf Hotels Group; Naim Maddad, CEO, Gates Hospitality and Dimitris Manikis, President EMEA, Wyndham Hotels and Resorts.
Allison said: “GIOHIS goes from strength to strength each year and highlights the demand for an open and honest conversation within the industry to share and discuss pressing issues in a supportive and open-minded environment. With support this year from leading industry executives participating from all over the world, we are looking forward to providing high-level expertise and guidance during what has been a particularly challenging time for the sector.”
While the sector will inevitably be focused on recovering its position after the challenges of Covid-19, its leaders are urged to prepare for issues such as intensified competition, a shortage of labor, new regulatory requirements, rising energy prices and the need for investment in technology.
Allison, who is also CEO of HOFTEL, a network of hospitality property investors, believes the core GCC tourism markets are well placed for a rapid resurgence, but warns that owners and operators which fail to plan for these potential obstacles will be hit hard. GIOHIS 2021, which is being hosted by the Ras Al Khaimah Tourism Development Authority, will bring together leaders from across the hospitality sector to share knowledge and ideas about the challenges and opportunities they face in forging a path towards sustainable growth.
“Covid-19 represents the greatest challenge that our industry has ever had to face,” said Raki Phillips, CEO of Ras Al Khaimah Tourism Development Authority. “Ras Al Khaimah is a case study in effective recovery management with a number of initiatives including being the first safe city worldwide as accredited by Bureau Veritas and WTTC, launching a financial stimulus package to support our hotels and attractions, as well as providing travelers free return PCR testing. The Authority was able to react in an agile manner to help the travel and tourism industry get back on its feet, paving the way for our industry partners to operate safely and creating an environment in which they could bounce back quickly.”
“As the global tourism sector navigates Covid-19’s long-lasting effects, we look forward to welcoming experts from the region to facilitate important conversations and discuss key learnings to ensure continued success for the industry post-pandemic,” he concluded.
Allison urged hotel owners to focus initially on not letting costs escalate to 2019 levels, thereby positioning themselves better for the various headwinds they face. He says: “To keep a lid on costs, the sector will require more efficient working practices, and potentially some additional investment in automation. It will mean looking hard at the sales department and asking whether new functions for online marketing have been replaced or just supplemented – and added to the cost of – existing ones. Cost of guest acquisition remains a big issue for owners, particularly with the growing dominance of online travel agents, which is driving new ways of reaching customers directly, whether through social media or the big brand loyalty programs.
“For many owners, it will also mean looking again at their relationships with brand partners. Over the years, as owners have pegged back base and incentive fees through stronger negotiating, the big global brands have added multiple recharges, often lost in a “system” or “program” charge but effectively charging back a vast array of management functions to owners who might once have thought they were covered by the management fee. This can amount to millions of dirhams per hotel, per year. Some owners are setting up their own management companies or hiring white label operators to cut these costs and, to their credit, many of the global majors are increasingly willing to convert their management contracts to franchises.”
While the whole world has learned lessons from the pandemic and will be embarking on a program of recovery, Allison recommends a cautious approach for the hospitality sector.
According to Allison, the UAE has set a good example for the industry by restoring traveler confidence with its rapid vaccination program and compulsory masks, combined with largely open borders. He points out that this strategy has been incredibly successful, and while some markets remain in recovery mode, others such as Ras Al Khaimah and upscale beach areas in the UAE, are actually trading ahead of pre-pandemic levels.
