After the world economic crisis, the travel and tourism sector recovered on the back of a moderate but steady growth in business travel, particularly from emerging economies. However, the outlook for 2014 shows that leisure travel is surpassing business travel, necessitating change in strategy for the sector.
Within this segment, corporate travel is giving way to the meetings, incentives, conferences and exhibitions (Mice) section, which has been growing faster than traditional business travel since 2009. According to trade show ITB Berlin’s ITB World Travel Trends Report (WTTR) 2013-14, released late last year, “In terms of different market segments, leisure travel is clearly outgrowing business travel. Over the past five years, spending on holidays has grown by 25 per cent and on visiting family and friends by 17 per cent while business travel only increased by 16 per cent.”
Change in focus
This shift in focus from business travel, driven by corporate accounts, to leisure travel will mean that hotels, destination management companies and other stakeholders will need to change their strategy to cater to a different type of traveller.
The outlook for the region remains positive. Since 2009, within the leisure travel segment, the volume of city trips has increased by 47 per cent, according to WTTR.
Andrew Robinson, Resident Partner, Transportation and Leisure, KPMG Lower Gulf Limited, a business consultant firm, tells GN Focus that the obvious impacts of the shift in focus from business to leisure include more hotel facilities close to beaches, malls and sporting venues. “Also, there has to be a growth in the range of hotel and apartment facilities. We will see an increasing number of two-, three- and four-star properties to cater to families and budget leisure travellers. Hotel operators will consider introducing other brands to operate these types of properties to differentiate them from their high-end brands. This will also be reflected in the expansion of budget and charter package holidays to Dubai. We could also see growth in surrounding markets such as Ras Al Khaimah and Oman to provide multi-destination leisure holidays,” he says.
Growth in Mice
The shift in focus comes at a time when Dubai is getting ready for one of the biggest exhibitions in the world, Expo 2020.
WTTR records substantial cuts in corporate travel spending along with growth in the Mice segment. The report says, “In the business travel market, there has been an interesting shift in demand.
“The so-called Mice sector has grown much faster than traditional business travel since 2009. Over the first eight months of 2013, the Mice segment grew by 6 per cent, while traditional business travel shrank by 10 per cent.”
