On Thursday June 23, the United Kingdom and Gibraltar voted in the European Union membership referendum. Commonly referred to as Brexit (a compound of “Britain Exit”), the referendum resulted in a 52% majority voting for the UK to leave the European Union. At the time of writing the pound continues to be in decline against the US dollar at $1.30 (according to Reuters UK), its lowest value since 1985. Where this concerns the Middle East’s hospitality industry, is the reliance of many hotels within the region on the UK as a key source market.
Countries in the region such as the UAE, which have not only historically welcomed a large percentage of visitors from the UK, but also have currencies that are pegged to the US dollar, could be acutely affected by Brexit. It is an initial sentiment echoed by Hotelier Middle East’s own readers, with a majority (58.5%) of voters in our online poll saying that they do believe the devaluation of the pound will eventually decrease the number of UK visitors coming to the region.
According to Dubai Corporation for Tourism and Commerce Marketing’s (DTCM) figures, the UK represents Dubai’s third largest source market, with more than 60,000 British tourists visiting the emirate in the first half of 2016 alone.
In contrast, Ras Al Khaimah measures the UK as its second largest source market. Ras Al Khaimah Tourism Development Authority (RAK TDA) also calculates a 30% year-on-year increase in UK visitors to the emirate.
According to Patrick Antaki, complex general manager for Al Maha Desert Resort & Spa in Dubai and Le Méridien Al Aqah Beach Resort in Fujairah, the UK produces the third highest room business for the cluster. This “important source market”, as Antaki called it, contributes 12.5% total occupancy for the cluster, and has seen a healthy 10.5% growth in 2016, versus 2015.
Ashmita Sequeira, director of sales for the Media One hotel in Dubai, revealed that the UK represents one of the Media City property’s top three source markets.
Also reporting growth, Sequeira told Hotelier that the UK market represents 15% of visitors to the hotel, a number that she said had grown steadily in the last five years, from 9% to 15%.
These growth figures, are of course, results achieved prior to the recent devaluation of the pound, and most of these hoteliers confirmed that the effects (if any) of Brexit on the hospitality industry, will not be seen in the short-term.
RAK TDA CEO Haitham Mattar told Hotelier: “We haven’t seen any impact, I have to say, yet. One of the reasons, you have to appreciate, is that British travellers do book quite in advance, pay in advance, and take advantage of advanced booking discounts.” He added: “Whether we see a decline or not in the future, I think, that is something to keep a close eye on.”
Media One’s Sequeira agreed: “We don’t foresee an immediate impact on business levels from this market. Any repercussion would probably be visible in a year or so when the clients evaluate their travel budgets and choose a destination.”
Despite the results of Hotelier’s anonymous poll, when speaking directly to industry experts, there appeared to be a prevailing attitude of positivity. “The impact of Brexit will invariably need assessment in the medium- to long-term; however we believe tourism — especially for Dubai with its well-rounded proposition and truly competitive global positioning — will continue to hold a strong attraction for our UK visitors,” DTCM CEO Issam Kazim told Hotelier.
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