Industry experts say now is the time to invest

Hoteliers in the region have said that even with a potential economic slowdown, it’s important for investment in hospitality to continue, as a return on investment will come once the market rises again.

Speaking to Hotelier Middle East, Hilton Worldwide vice president development Middle East & North Africa Carlos Khneisser said: “Despite what you think about business slowing down, we are dealing with investors who are smart.

"This is the right opportunity for investors to develop hotels — because the transportation cost is low, construction material [costs] are lower than in the past."

He continued: "It is a ripe opportunity for investors to take advantage to develop hotels, so that when the market is back, they start trading on a higher note.”

Echoing this was Dur Hospitality CEO Dr Badr Al Badr, who said: “Downturns are times where you have lower occupancy, where you have more room to renovate the facilities or add new outlets or restaurants to the facilities.

"It is also a time when some banks reduce lending rates. We believe that at the upturn of the cycle, we will be ready to capture the increase in demand that comes about.”

STR MD Robin Rossmann also told Hotelier: “It’s not going to be easy; there’s going to be a lot of up and down, but there’s a reason why people are investing in hotels. And it’s not because they think they’re going to lose money, it’s because they think they’re going to make money.

"If you look at the level of returns on hotels, it’s double digit return on capital and you don’t get that in many other places in the world.”