Hotelier Middle East presents a round-up of the burning issues, top trends and stand-out openings in the region’s hotel industry this year

As a New Year dawns, hoteliers are more likely to be seeing entering 2010 with trepidation than with a spring in their step. The optimism of a recovery this year that many had spoken of during the first half of 2009 has long since diminished, with everyone from owners to line staff far more realistic about business prospects in 2010. Expectations are toned down and forecasts lower, with hotels aiming for a better year — as opposed to a good year.

On the plus side, hoteliers face significantly less uncertainty than at the start of last year. As the saying goes, forewarned is forearmed. The industry coped with the shock start to 2009 and is now far more prepared to manage the downturn through 2010 — cost saving strategies have been tried and tested, recruitment policies amended and sales approaches more proactive.

Hotels experimented with solutions to counter the impact of the crisis and now have this tried and tested knowledge and experience to help them power into 2010.

And it is not just this new-found wisdom that will work in the industry’s favour; the facts and figures show an industry that is surviving the crisis. According to STR Global data, despite declines, the Middle East still recorded on average higher revPARs and occupancies than other regions. So, people are still checking into the region’s hotels and the softening of rates throughout 2009 has not, generally speaking, had a damaging impact in the short-term.

But what about the long-term impact of the economic crisis? How will the Middle East hotel industry plan for success and growth in the future, while still struggling to secure the bottom line in the present time?

As we said, forewarned is forearmed, so in order to plan ahead, hoteliers must understand the trends that have dominated the industry over the past 12 months.

According to Fairmont Hotels & Resorts regional vice president UAE Philip M. Barnes, also general manager of Fairmont Dubai, “to understand the trends of 2009, one has to understand the consumer”.

“Unemployment is at levels not seen in decades in many parts of the world, and from the factory floor to the executive boardroom, people have suffered losses in investments from stock to pensions. This has resulted in a much more cautious approach to life in general, and the dirham spent today is far more significant than it was a year ago,” observes Barnes. “Value for money is firmly placed top of mind with today’s consumer, and there is a return focus on savings influencing every decision to purchase,” he adds.

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Accor Hospitality Middle East managing director Christophe Landais urges dynamic pricing from hoteliers to meet this need.

“Since the bargaining power of suppliers has shifted to buyer, hotels need to adopt a more tactical pricing policy by segment and distribution channels. Moreover, hotels should seek not what clients are capable to pay but what they are willing to pay, still keeping the overall pricing strategy in mind,” he says.

This is a trend also noted by Hilton Worldwide, Middle East & Africa president Jean-Paul Herzog, who says that value is particularly being sought by business travellers. “Given the economic climate, we are seeing great demand from the business traveller for mid-market brands like Hilton Garden Inn. Given this segment is in its infancy, we expect demand to continue,” says Herzog.

While the demand for these mid-market brands is ongoing, Herzog warns that the hotels must still meet the high standards associated with the industry in the Middle East.

“The Middle East has built up a strong reputation for exemplary standards of quality,” he says.

“As economy and mid-scale brands gain currency and popularity, our primary challenge is to launch and position these brands in the region, while managing guest expectations,” adds Herzog.

The growth of these brands also means that four- and five-star brands need to add more value; luxury isn’t enough on its own anymore.

This approach has been adopted by The Rezidor Hotel Group, says area vice president Marko Hytönen, who oversaw the opening of eight new hotels and 2271 rooms in the Middle East during 2009 — a record number for the group, which opened 34 hotels in total worldwide.

“I think that added value will continue to play a role in attracting customers and it is something that has proved successful with our Radisson Blu brand — free internet access, late check-out, super buffet breakfast etc,” says Hytönen.