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Wed 18 May 2011 08:44 PM

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Asia, Latin America markets key to GCC hotel groups' growth

Jumeirah, Emaar hotel chiefs say China, India, Brazil and Russia targeted for future tourism growth

Asia, Latin America markets key to GCC hotel groups' growth
Beijing in China, one of the target markets for GCC hotel groups. (Getty Images)

Senior hotel officials in the GCC region have identified markets in Asia and South America as key drivers for growth in the future.

China, India and Brazil were named among target markets by officials speaking at the Hotel Show Summit in Dubai.

Thomas Grunder, vice president of global sales for Dubai-based Jumeirah, said the group was "very comfortable" about its expansion plans which would aim to bring more tourist from China, India and the CIS states which includes Russia.

"People want to come to Dubai and diversification of the hotel sector with more luxury and more exclusive hotels as well as three-and four-star properties means the emirate can now approach different customer bases to fuel growth," he said.

Marc-François Dardenne, CEO of Emaar Hotels & Resorts, said it was targeting countries closer to home initially such as the rest of the GCC and India.

But he added that the company would also be setting up sales offices in China and looking at Brazil and Africa as source markets in the future.

Assessing the current health of the hotel sector region-wide, Elie Younes, vice president, Business Development, Rezidor Hotel Group, said business had been and always would be cyclical.

"For instance, in 2010, Egypt was a top performer and our hotels had an unbelievable year," he said. "While that situation has changed, for the rest of the region, there are not yet enough indicators to say whether the bad times are behind us.

"There are signs of recovery in the UAE and Saudi Arabia although confidence has not fully returned yet, while Beirut is under-performing and there are inherent issues in the Kuwait and Qatar markets, with each having to position differently to diversify from their major corporate base."

Delegates at the summit agreed that the expansion of three-and four-star hotels in most Middle East markets would serve to pull down average daily rates (ADR) which have remained among the world's most expensive for many regional cities.

"For the first quarter in 2011, average occupancies in Dubai hotels were back above the 80 percent mark, and while average daily rates have taken a plunge, they still exceed $200," said summit moderator Jalil Mekouar, managing director, Hotels, Jones Lang LaSalle, pointing out this was greater than Hong Kong, Paris, New York and London.

"Room stock in the region has historically been at the high end but as the supply gets balanced with big opportunities for three-and four-star hotels opening up, this will bring down average rates," added Rezidor's Younes.

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