The importance of variety when it comes to hotel offerings in any city cannot be underestimated, especially when it comes to cities in the Middle East and North Africa, many of which are focused on tourism efforts to further diversify their economies.
When it comes to travellers, they have a triad of expectations from where they stay and what they do. Some people only ever want luxury hotel stays, others prefer affordable or budget options with money preferred to be spent on experiences. So we can admit that there is an abundance of five-star and luxury hotels in the region, and I only recently mentioned why the four-star market is a gap that still needs to be taken further advantage of (see March 2018 issue).
However, despite the relevance of the mid-market hotel in the current travel climate being emphasised constantly, it’s interesting to hear that the numbers haven’t quite caught up yet with the perceived hype. If you think the development of the mid-scale sector is going gung-ho, think again.
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STR managing director Robin Rossmann talked about hotel supply at the Arabian Hotel Investment Conference (AHIC) and revealed that hotel supply in the Middle East grew faster than anywhere else in the entire world in 2017.
He said: “We heard a lot of talk about the potential for mid-market hotels. The reality is in our databases at the moment still there is very little supply that’s coming through the mid-market. Out of the 70,000 rooms that we have in Dubai, 20,000 are less than upscale and luxury. With all the talk of the opportunity — and I do think there’s opportunity — that’s not yet reflected in the pipeline that we are seeing.” Mohamed Alabbar, who was interviewed onstage at AHIC, also asked what kind of supply was being pumped into the market.
He said: “Demographics are changing, consumers are changing, but are we building the right hotels for the demand?” He pointed out that the new generation of travellers probably don’t want to live in five-star hotels, and revealed: “When we decided to build Rove, the study showed that this market is underserved and we just had to go jump in there.”
Kenneth Macpherson, IHG CEO for EMEA said, also during AHIC, that he is seeing growth in mid-scale especially with Holiday Inn and Holiday Inn Express. Macpherson said that the markets are restructuring with a diversification being shown both on the demand and supply side.
In our New Opening feature this month with the Holiday Inn Dubai Festival City, we show how the company is introducing a mid-scale option in an area which has traditionally catered to the upper upscale market. This opening, the team said, hopes to further increase market share of the IHG cluster in that area.
So the hoteliers are eyeing the market needs and working on diversifying their portfolio. The question is, when will the numbers actually back it up?
As Alabbar pointed out during his interview: “I want to do business with the 80% of population, not just 20% of the population.”
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