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Hoteliers gathered for the Arabian Hotel Investment Conference advisory board meeting to discuss industry issues and opportunities to help set the agenda ahead of the annual conference.
At the meeting, the advisory board agreed that midscale and lifestyle segments remain largely untapped in the Middle East, providing an attractive option for operators and investors. However, some speakers also cited fluctuating demand and legal regulations as challenges for the segment.
Rezidor Hotel Group director business development Middle East and Africa Elie Milky said: “Expanding cities are creating various sub-markets for potential hotel investment, and obstacles include increased competition, increasing value of land, pockets of regional instability, among others.
“Various markets are keeping us busy starting with KSA and the UAE, and the different submarkets from within. Some markets are returning such as Egypt, with ad-hoc opportunities in Libya, Kurdistan, Oman and Qatar.
"The deals we are involved in cover various segments from the midscale to the luxury segments, with asset classes ranging from traditional hotels to serviced apartments."
During the event, an STR presentation on hotel performance and trends in the Middle East revealed that Dubai’s midscale and economy class hotel occupancy rates had reached 88% in the previous month.
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As of July 2014, the Middle East has witnessed an increase of 5.5% YTD RevPAR and a 41% increase in the number of hotel rooms. The statistics also showed that the demand is currently higher than the supply by 2.5%. Occupancy rates were the highest in Dubai where it reached 78% and ADR was at US $248. In the region, Manama enjoyed the highest RevPAR, where it reached 17.7% %.
Speakers at the meeting also expressed interest in Egypt’s tourism and hospitality sector, with Egyptian Resorts Company commercial director Abu Bakr Makhlouf saying: “We’re looking at Egypt and we see great potential in building new destinations with self-sufficient and fully managed environment offering a 360 hospitality experience.
“This is because long-term demand for Egypt is an upward curve while current supply of reasonable quality is near capacity at the few tourism hubs. Infrastructure is at its limits and investors need to expand outside conventional cities with excess demand and deteriorating end-user experience.”
The AHIC advisory board meeting was attended by more than 40 executives from regional and international hotel groups, including Accor senior vice president development Olivier Granet, Habtoor Hotels managing director of hospitality Henning Fries, IHG vice president of development – Middle East & Africa Taras Ettl, and JLL Hotels executive vice president and head of hotels & hospitality Chiheb Ben Mahmoud.
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