Accor eyes UAE growth with 'premium economy' stays

Dubai: While the Middle East is synonymous with high-end hotels, French hospitality giant Accor’s non-luxury brands - Pullman, Ibis, and Novotel—are seeing strong growth in the region.

This aligns with a broader shift toward mass-market tourism, driven by ambitious government targets: Saudi Arabia aims for 150 million tourists by 2030.

The UAE is targeting 40 million hotel guests by 2031, and Dubai’s upcoming mega-airport is set to accommodate 230 million passengers.

For Accor– whose subsidiaries include Ibis, Mercure, Sofitel, and Fairmont Hotels and Resorts – the UAE remains one of the main revenue drivers of in the region.

The group plans to tap into the 'premium economy', extended-stay residences, and other serviced apartment segments to fuel regional growth.

The 'premium economy' concept started off with airlines, as they created seating options with rates between those in Business and Economy classes.

“Investor interest in the UAE remains strong - One of the noticeable trends is the rising demand for extended-stay residences, such as Pullman Living and other serviced apartments,” said Duncan O’Rourke, CEO of Middle East, Africa and Asia-Pacific at Accor.

This suggests a shift in the market towards longer-term accommodations.

O’Rourke emphasized that despite being a mature market for the hospitality sector, there are still opportunities in the UAE, particularly in Abu Dhabi.

The CEO said if conflicts in the Middle East do not escalate further, the region should continue to see steady numbers. “The sharp 9-10% increases seen pre- and post-pandemic will level out, leading to a more sustainable growth rate,” he said.

Accor, the world’s sixth-largest hospitality group, has 365 hotels (89,600 keys) in the Middle East and Africa (MEA) region, with 14 new properties to open in 2025. These include Swissôtel Doha Corniche Park Towers, Mercure Khamis Mushait, Grand Mercure Dubai Downtown, and Mantis Al Baha.

In the UAE, Accor's 86 hotels feature 24,500 rooms across 22 brands, with 12 more hotels (3,100 rooms) in the pipeline. The group's Saudi presence extends to 42 hotels across 14 brands, with 44 more locations in the pipeline.

O’Rourke said: “We remain very committed to this region. Our revenue was up 12% in Q3-2024, a strong performance and 5.3% higher than year before.”

Within its MEA operators, Accor has an over 22,000 strong workforce. “We see a 6% year-on-year headcount growth,” he said.

“One of the biggest challenges in the industry is recruiting the right talent—not just at the corporate level, but also at the hotel level. We recently partnered on a deal in Saudi Arabia where we train 1,500 employees a month through a joint venture.

"We continue to hire, and that’s the beauty of this industry—it’s constantly growing,” he stated.

O’Rourke said Accor is open to flexible work arrangements. “Some of our office employees work two or three days a week,” he stated.

“Saudi Arabia is another major driver, and continues to be our priority," the official added. "Our presence in the Holy Cities, especially with the Clock Tower, has been a significant contributor.

“Egypt is also performing well, with Cairo continuing to see strong numbers, and most of our Red Sea resorts are maintaining stable performance, though a few have been impacted (by the regional situation).”