Middle East hotel sector set to defy global slump

Dubai: Global tourism indicators show that 2008 will be a slower year but the Middle East is demonstrating incredible resilience with hotel brands expanding their property portfolios at a ferocious speed, according to Deloitte's latest report.

"In 2007, the region had the largest increase in visitors in the world at about 13 per cent with Saudi Arabia enjoying one of the best growth rates across the region at almost 51 per cent. The region had the largest rise in air passengers in 2007 as well, and is spending around $43 billion [Dh157.81 billion] improving its airports," said Omar Fahoum, chief executive of Deloitte Middle East.

He said the Middle East is now achieving the strongest levels of occupancy and average room rates in the world and with the second fastest growth rate; a five year run of double-digit growth is now looking to be a certainty.

"The aviation industry is responding to the surge in tourist arrivals by strengthening existing connections and introducing new routes, giving access to an increasing number of source markets. Several low cost carriers have recently expanded and entered into the market making it easier to travel locally," he said.

In 2007, the Middle East had the world's fastest growing air traffic - up more than 18 per cent and the world's fastest growing tourist arrivals - up 13 per cent, knocking Asia pacific into second place.

He said in Dubai, around $14.3 billion (Dh52.48 billion) will be spent in the next five years on tourism infrastructure, such as roads, metro system and a water taxi scheme.

He said global tourism is expected to generate about $8 trillion (Dh29.36 trillion) this year despite the financial turmoil.
"There has been exceptionally strong growth in markets like Egypt and Jordan, which have lagged behind in recent years; while Oman, offering a more cultured experience than the year-round "suntan with shopping" slogan of some destinations in the Gulf, saw a massive rise in revenue per available room [revPAR] in 2007, up by more than 50 per cent," he said.

Rob O'Hanlon, Tourism, Hospitality and Leisure Partner for Deloitte Middle East, said: "So far in 2008, the region's hotels are enjoying some of the world's highest occupancy figures, strongest revPAR and best average room rates, and with predictions that international visitor numbers here will grow between 6-10 per cent in 2008, compared to a global rate of 3-4 per cent, there seem to be few clouds to spoil the region's sunny outlook," Omar said.