Rotana to launch pilot scheme with Airbnb in Dubai
Rotana is piloting a direct distribution agreement with Airbnb in Dubai, Guy Hutchinson, acting CEO, Rotana, revealed at a roundtable held in Abu Dhabi on March 12, 2019. Figures released during the event also showed positive results across three key performance metrics in the first two months of 2019.
Speaking about the Airbnb pilot scheme, Hutchinson, who did not provide details about the number of properties to be included in the pilot project, said: "This is the first time in the UAE a hotelier has entered into an agreement with the online marketplace and hospitality service listings company."
Hotelier previously reported that Dubai's Airbnb market is worth over US$101 million. The figures were released in a report focusing on the growth of Airbnb in Dubai by real estate services firm Chestertons MENA. The findings showed that 2018 saw a year-on-year increase of 69% in market revenues with the Airbnb market now generating more than $101 million in the emirate.
Across the board growth
Hutchinson also revealed that during the January-February period of 2019, Rotana hotels in Abu Dhabi delivered stronger growth as compared to properties in other emirates. The findings recorded a 3.5% growth in occupancy, 2.3% increase in ADR and 5.9% rise in RevPAR.
Rotana properties in Beirut and Riyadh posted 17% and 15% rise in occupancy and 29% and 48% surge in RevPAR respectively, as compared to the same period in 2018. Similarly, ADR and RevPAR soared 24.8% and 9.8% in the company’s resort in Sharm El Sheikh, while Manama saw a 5% rise in occupancy rates.
“Most of our markets in the region posted firm growth in occupancy, ADR, and RevPAR. This is mainly due to our relentless focus on improving product offering, expanding portfolio and enhancing commercial efforts,” Hutchinson said.
Figures posted showed that room nights coming from Saudi Arabia, which, according to a statement, is one of the key feeder markets, have increased by 15% in the first two months of this year. In 2018, the UAE, the UK, Saudi Arabia, Germany, and India topped the list of leading feeder markets.
(continues on next page)
Opportunities, challenges, trends
Highlighting key opportunities in the market, Hutchinson said that with the growing public spending in tourism sectors, driven by the ambitious economic diversification roadmaps for the regional economies, including the UAE Vision 2021 and the Saudi Vision 2030, the region’s hospitality sector is on the tip of a tremendous transformation.
Hutchinson cited major upcoming events, such as Expo 2020 Dubai, and tourism initiatives, including the $500 billion Red Sea coastline project, NEOM mega-city project, Al Qiddiya Entertainment City, Farasan Islands, and the 3,000-square-kilometre Amaala luxury destination project in Saudi Arabia, will further strengthen the region’s reputation as an attractive destination for tourists and investors alike.
Speaking about challenges facing the hospitality sector, Hutchinson said that the GCC region is expected to see an additional 58,000 keys entering the market in 2019, with destinations such as Dubai, Makkah, and Riyadh accounting for the highest increases in supply.
“These new stocks will intensify competition leaving further pressure on room rates. As a result, maintaining profit margins will be a key challenge for hoteliers this year,” he said.
On trends, Hutchinson said hotel operators will continue to explore new markets for expansion and they will place a significant emphasis on the development of green and mid-scale offerings.
In addition, improving guest experiences will remain a top priority for industry players and disruptive technologies will unleash new possibilities in product and service offerings.
Hutchinson also said: “Profits management is becoming increasingly important for hotel operators. As a result, they are expected to continue adopting tighter cost control measures through clustering and outsourcing part of their services.”
Continued expansion
Between 2019 and 2020, Rotana will open nine new properties to bring its strong inventory of operational keys to 21,135.
Properties opening in Q2 2019 include Johari Rotana, Dar Es Salaam (256 keys), Bosmal Arjaan, Sarajevo (130 keys), and Dana Rayhaan, Dammam (285 keys).
Hotels to be launched in Q4 2019 include Imam Reza Rotana, Mashhad (272 keys), Al Jaddaf Rotana, Dubai (338 keys) and Slemani Rotana, Iraq (240 keys). In Q2 2020, Rotana will open Centro Amman, Amman (197 keys) and Cayan Cantara Arjaan (329 keys) and Cayan Cantara Residences (489 keys) in Dubai.