UAE hotel market 'extremely dynamic'

After a period of low vacancy rates, recent reports indicate that activity is beginning to build up in the UAE's hospitality sector. Sensing the pulse of the market, Essam Abouda, vice-president — operations, Hilton Worldwide, Arabian Peninsula and Indian Ocean, is in an upbeat mood. "Despite the serious challenges resulting from the macroeconomic environment, we see the global markets improving," says Abouda.

Hilton Worldwide, the global hotels major, has been quick to identify the emerging opportunities and is steaming ahead with its expansion plans in the Middle East and Africa, including the UAE. The effort is to build on demand for value deals. "During the downturn, rates have come under pressure, but occupancy is improving and we expect rates to follow. However guests are not focused purely on the rate, they are focused on getting good value and that is what we strive to offer our guests across all our brands."

Hilton has lined up an exciting development plan with 28 hotels (9,025 rooms) set to open across the Middle East and Africa in the next few years. "Our pipeline includes the first Doubletree by Hilton in Ras Al Khaimah and Conrad in Dubai as well as hotels in new markets for us such as Qatar," Abouda elaborates.

Hilton Worldwide's plans in Saudi Arabia include properties in Riyadh and Al Khobar, while Kuwait, Egypt and Jordan are some of the other markets where the group is launching new hotels.

The group currently has nine hotels in the UAE, with five more set to launch. Abouda attributes Hilton's increasing interest in the region to the positive signs emerging from the markets in the recent past.

Abouda on...

...the country's hospitality sector

We have had a good run in 2010 in the UAE - this is partly thanks to the number of activities around the various emirates - the F1, Art Dubai, the RAK Marathon, etc. As a market, the UAE is extremely dynamic and is yet to reach its peak. Each of the seven emirates is a distinct destination and each plays to their strengths to attract tourists and grow their tourism and hospitality industry. Dubai is the land of sun, sand and shopping; Abu Dhabi is transforming into the go-to destination for culture-lovers and music and film fans, while Al Ain, Fujairah and Ras Al Khaimah provide vacationers a taste of the quieter corners of the UAE. Among all the seven emirates, it attracts a very broad cross-section of international and regional travellers. We host a mix of holidaymakers, business tourists, adventure tourists, religious tourists and transit travellers on a stopover. Among vacationers, there is a lot of scope for cross-selling between hotels in various emirates. We also host a lot of ‘staycationers' — Dubai and Abu Dhabi residents looking to take a break from city life — at our Ras Al Khaimah, Al Ain and Fujairah properties. 

...Dubai vs Abu Dhabi

Despite being so close, the two cities have their own unique USPs (selling propositions.) Both are strong markets but cater to different segments. Abu Dhabi is fast-becoming the arts and culture lovers' paradise. Manarat Al Saadiyat and Abu Dhabi Art are already creating waves in the international market and with the Guggenheim Abu Dhabi and Louvre Abu Dhabi set to open, the capital will be a major draw for art connoisseurs around the globe. Abu Dhabi has seen a large number of hotels opening up over the last three years which has changed the dynamics of the market, particularly as the city continues to open up towards the airport. With the Abu Dhabi 2030 strategy coming into place, we can expect a lot more infrastructural improvements and tourist attractions that will add to the appeal of Abu Dhabi and indirectly to the hospitality industry. Dubai is a melting pot of nationalities and cultures and the Dubai lifestyle is very fast-paced and cosmopolitan. There is an emphasis on quality in both hotels and eating out. Dubai has continued to perform during the downturn and will always be a top destination. 

...year ahead

Occupancy will continue to strengthen across the region this year but bringing back rates will be a challenge for the whole industry to tackle. Signing pace is picking up across the region and in particular we are seeing more conversion opportunities. With our new development office in South Africa, we anticipate making our mark in sub-Saharan Africa and making the most of the expanding hotel market there. I think 2011 will be the year of hotel openings in the Middle East and Africa. We are scheduled to open around 11 hotels across the region and will also enter three new countries.

Factfile

Name Essam Abouda
Position Vice-president - operations, Hilton Worldwide, Arabian Peninsula and Indian Ocean
Nationality Egyptian
Profile Abouda has been working with the group for the past 29 years.