Fast recovery predicted for Mideast tourism

A leading industry expert has said significant investments made in the Middle East's tourism industry during the last decade will help it recover from the current economic downturn quicker than other areas.

Robert O'Hanlon, Tourism, Hospitality and Leisure Partner at Deloitte Middle East, believes the challenges of global financial fall-out and dollar-pegged destinations becoming more expensive for UK and European travellers could be mitigated by hotel brands providing more value for money options.

O'Hanlon predicted that growth in budget and premium hotel options will ensure the Middle East navigates the global tourism downturn, which saw regional revenue per available room rates (RevPAR) drop by more than 10 percent from November 2008 to January 2009.

"Gulf countries have signalled they are willing to invest in long-term, sustainable tourism developments which appeal to a global audience. The hotel industry is viewed by these players as the decisive driver in the development of their business and tourism sectors," said O'Hanlon, who will give the keynote speech at the Arabian Travel Market 2009, which takes place in Dubai in May.

"I fully expect the Dubai-led trend in facilitating for quality mid-market and budget accommodation to expand to other regional centres," he added.

Although most regions were reporting double-digit growth in hotel performance in the first six months of last year, the credit crunch bite and deepening recession eventually saw significant declines in RevPAR growth, with North America down 1.6 percent and Europe and Asia Pacific registering growth of less than two percent for 2008.

However, the Middle East - buoyed by an 11.3 percent increase in visitors (up to 52.9 million for the calendar year) - turned in strong overall RevPAR growth of 18.3 percent to average out at $148, placing it ahead of Europe for the first time.

"In the Middle East, occupancy rates were 70.9, 72.6, 68.8, and 60.8 percent in October 2008 through to January 2009 respectively. Whilst these remain high by global standards, they reflect a drop compared to the prior year. This decline mirrors both the lower global demand and the increased supply during 2008."

O'Hanlon also issued a stark ultimatum to the region's hospitality industry, stating if it was to weather the current storm, it needed to remain committed to providing quality value and services.

"They (hotels) must resist the pressure to slash rates and provide a lesser-quality service. The strategy for the tourism industry this year is to focus on survival; for hotels in particular this means providing value for money," he said.

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