Leisure hospitality in Abu Dhabi could prove the bigger draw in 2016, outpacing less than stellar returns expected for business hotels in the emirate.
The luxury leisure hospitality sector could pick up the slack experienced in business visitors’ space in Abu Dhabi, according to a Gulf News report.
Declining oil prices has resulted in an “impact on visitation in the capital, with many hotel operators indicating that there was a softening of corporate demand particularly in terms of oil and government related visitation,” according to a report by consultancy firm Knight Frank.
“With oil prices forecast to fall further in 2016, this trend is likely to continue — however this is anticipated to be counterbalanced to some degree by increasing leisure demand.”
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“While Abu Dhabi has historically been driven by corporate and MICE visitation, leisure tourism has seen a boost over the past few years supported by the development of leisure demand generators, including Saadiyat Island, Yas Waterworld, Yas Mall, and the Du Arena,” the Knight Frank report adds.
“This trend is expected to continue as future demand generators such as the upcoming Cultural District are completed.”
The Knight Frank report adds that there are opportunities for additional hotels in Abu Dhabi, though not of the luxury type.
“Opportunities for further hotel development still exist in the capital—however they are not necessarily in the luxury segment but rather in the development of midscale hotels and internationally branded serviced apartments.”
“These two asset classes are underrepresented in the market to date, and may be a safer bet than further iconic flagship developments in the years to come.”
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