Kuwait’s hotel backdrop is set to become even more vibrant in from this year until 2020, with a plethora of new outlets ready to storm the scene. From Hilton introducing two new brands at The Avenues Mall in Kuwait City this year to Four Seasons launching a further two properties across the country and a 2020 proposed opening of a Grand Hyatt, existing hotels will no doubt have to up their game to stay relevant.
But while performance indicators for the last year reveal it has not been plain sailing for existing players, questions arise as to what the attraction is that is drawing so many big brand names to launch new outlets across the country.
According to Colliers International, a global commercial real estate consultant, despite being “one of the most consistent markets in the GCC” in performance terms, the year to end-July saw a slight drop in key performance indicators. While occupancy was up to between 50% and 52%, from 49%-51% a year earlier, RevPAR fell to US $116-118 from $125-128 year-on-year, the drop stemming from lower demand from corporate business.
Nevertheless, Filippo Sona, director, head of hotels for MENA, says overall, tourism in Kuwait is maintaining a consistent growth rate of 3%. Compared to other markets in the GCC he adds, Kuwait has “performed consistently” in KPI terms.
Kuwait has a lot going for it. Sitting at the head of the Arabian Gulf, neighbouring Iraq and Saudi Arabia, its strategic location appeals to many a business and corporate clients. The 300-year-old country has a rich history. It is famous for everything from pearl diving to its stunning architecture which includes the Kuwait Towers and the Sabah al-Ahmed Sea City, the transformation of a rundown salt marsh into a fully functioning city with marine environments and beaches, set to house 250,000 residents in the near future. The country is also becoming a rising star in the medical industry, housing the KWD14mn ($46mn) Dasman Diabetes Institute, hailed in the medical world as an international research centre for the disease.
With much to see, it is not surprising Kuwait is drawing in tourists both locally and internationally. Year-on-year for the month of May 2016, passenger traffic into Kuwait International Airport rose 7% to over a million passengers. The airport recently signed off on a KWD 1.3bn ($4.31bn) expansion, set to see passenger numbers grow from five to 25 million on completion. And it appears hotel operators are capitalising on the opportunity this is set to bring.
Hilton’s Conrad Kuwait will add another 158 rooms to the country’s hotel landscape and Hilton Garden Inn Kuwait, a further 430. Both hotels will feature in The Avenues Mall which offers a retail unit, an outdoor pool and spa as well as a ballroom.
“With its number of shopping outlets set to increase by nearly 50%, demand for accommodation at a site which already attracts millions of visitors every year is set to increase substantially,” explains Rudi Jagersbacher, president, Middle East, Africa & Turkey for Hilton Worldwide. “Our Conrad and Hilton Garden Inn brands will enable us to cater for guests seeking either smart luxury or affordable accommodations during their stay.”
Guests and their ever-evolving needs are a key consideration for hotel operators, both those with new outlets and those with existing ones. The country’s population as of 1 January 2016 stood at four million, an increase of 4.79% on the previous year over half of which falls in the 24-54 age category according to World Population Review. By positioning the two new Hilton brands in The Avenues Mall, Hilton plans to attract Kuwait’s — and the wider region’s — growing youth population.
“Having hotels as part of The Avenues development will enhance the quality of the experience and the service we provide to our visitors. This will, in turn, support internal tourism and also place Kuwait on the regional tourism map. We have seen increasing numbers of visitors from abroad, in particular from the countries of the Gulf Cooperation Council, and this is a strong indication of the revival of tourism in the country,” says Jagersbacher.
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