Declining oil prices and softening demand made it a challenging first half of the year for Abu Dhabi hotels.
At Southern Sun Abu Dhabi, general manager Pierre Delfau says that “over 60% of guests” are from the GCC, while at The St. Regis Abu Dhabi, director of marketing Katie Malone says that on average, GCC guests contribute 30-40% of business, but that the percentage “fluctuates significantly throughout the year”.
Delfau adds: “We also enjoy strong support from European countries such as Germany, UK and France. Our group Tsogo Sun is well known on the African continent and the UAE is an attractive destination due to flight connectivity and proximity. We see this as a growing market, but we are always looking for new opportunities wherever they might be, either in the GCC or worldwide.”
Wiegerinck says the guest base at Le Royal Méridien Abu Dhabi varies depending on the seasonality. “In general, our number one source of business is the UAE, followed by the US, UK. For 2016 we’re seeing encouraging numbers from the GCC, with Saudi travellers growing significantly year over year. Most hotels are looking towards China and India, as we know these markets represent significant opportunities going forward.
“We’re spending a lot of time and money trying to make sure our product offering is in line with their expectations — both in terms of F&B and in-room amenities — but also by ensuring our social media and websites are available in various languages,” Wiegerinck reveals.
Future development
As the operators plan their second half forecasts, one factor playing a key role in the business outlook is the addition of new inventory. Wiegerinck says: “2017 should see an additional 11% increase in supply, with many of the world’s leading hotel companies adding properties to their Abu Dhabi portfolio. In short, the hotel market is under significant pressure — both in terms of companies looking to minimise their spending, as well as new supply being added to the market.”
The Abu Dhabi Hotel Market Summary report from JLL revealed that 200 rooms opened in Q2 2016 with an additional 2,200 rooms forecast to be added to the market by the end of the year. The Q2 report also predicts hotel room supply in Abu Dhabi is expected to reach almost 26,000 rooms by the end of 2019.
New openings anticipated by the close of 2016 include: Grand Hyatt Abu Dhabi Hotel and Residences Emirates Pearl, Gloria Downtown Hotel and the 677-room Bab Al Qasr, operated under Millennium & Copthorne Middle East and Africa’s Biltmore Collection brand and due to open in Q3. In 2017, Hard Rock Hotel Abu Dhabi is also due to come online.
Demand is there, with a year-on-year growth in tourism arrivals continuing, according to JLL, which reported an 11% increase in hotel guests for year to May 2016, compared to the same period to May 2015. Abu Dhabi Airports has also reported an increase in arrivals, with the total traffic for January to June reaching 11,848,359 million passengers — a 6.6% increase from the 11,111,577 passengers in the first six months of 2015.
Traffic to and from Doha and Jeddah both grew by 12% in June, with passengers increasing from 53,912 to 60,395, and 52,342 to 58,816, respectively.
The MICE segment has also performed well, with Abu Dhabi National Exhibitions Company (ADNEC) reporting AED 1.32 billion ($359.3 million) in direct and indirect economic impact. The company said it drew more than 812,000 visitors to its 124 conferences and 34 exhibitions at Abu Dhabi National Exhibition Centre and Al Ain Convention Centre in the first six months of 2016. It is this sort of supporting infrastructure that will be critical to the growth of the hotel business.
| Advertisement |
Search our database of more than 2,700 industry companies
