Accor Targets Over 30000 Rooms In Middle East By 2020

Accor HotelServices Middle East, one of the world's leading hospitality groups, announced its intention to double the size of its operations in the Middle East to over 30,000 rooms by 2020.

Sébastien Bazin, The Group's Chairman and Chief Executive Officer revealed the ambitious new target as the company celebrated reaching the major milestone of 100 hotels in operation (16,000 rooms) and approximately 9,000 rooms under development in the Middle East.

Mr. Bazin said, that "Our presence in the Middle East, which stretches back 35 years, has expanded significantly in response to the dynamic growth taking place in the region and reaching 100 hotels is a significant achievement.”

“Our commitment to double in size by 2020 is a bold statement of our confidence in the future of the region, the support of our partners who work closely with our experienced and localized teams here in our three offices in Dubai, Jeddah and Cairo, and the strength of our portfolio of brands that continue to deliver operational excellence and compelling returns."

He also explained the growth potential in the region by pointing out that there are on average only two rooms per 1000 inhabitants in the Middle East, compared to 10 and above in more matured markets.

Accor is seeing a rising demand for development of hotels across all segments, from luxury to economy, and that is why they have launched three new brands in the region, including Adagio serviced apartments, Majlis Grand Mercure and ibis Styles. Bazin also mentioned that they expect the growth to increase with improvement in infrastructure and delivery of key events in the region, Dubai’s Vision 2020 and 2022 FIFA World Cup in Qatar and Saudi Arabia’s target to attract 20 million visitors to holy cities of Makkah and Madinah. 

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GCC Hospitality Industry Set To Reach $35.9 Billion By 2018

The hospitality industry in GCC is forecast to grow from $22.8 billion (Dh83.7 billion) in 2013 to $35.9 billion by 2018 at an annual rater of 9.5 % according to a new report by investment bank, Alpen Capital.

The UAE’s Hospitality industry is expected to grow at a compound annual growth rate of 10 per cent between 2013 and 2018.

Average Hotel occupancy rates in GCC are expected to be between 68 percent and 74 per cent between 2013 and 2018, while the average daily rate (ADR) is likely to be between $225 and $263 during the same period.

The growth of the industry in the region will be fuelled by the shift in global activity from East to West, a rise in leisure travel, higher demand for serviced apartments, a shift towards budget travel and quicker construction pipeline, said Sanjay Bhatia, Managing director of Alpen Capital.

The sector’s growth is also expected to be driven by increase in international tourist arrivals, and a stronger MICE segment among others, said Sameena Ahmad, managing director of Alpen Capital in the Middle East.

According to the report, Saudi Arabia is expected to continue its dominance as the largest market in terms of revenue, followed by the UAE.    

The GCC has made major investments in the airport infrastructure, with Al Maktoum International at Dubai World is undergoing a Dh 117.5 billion which is expected to begin by end of the year. The airport will be able to serve 120 million passengers within six to eight year.

Airports across the region are expected to handle as many as 250 million passengers by 2020, according to Reed Exhibitions, quoting a study.

However, as the GCC countries are set to boost their hotel room capacity in the run up to major events, they also face the challenge of sustaining the demands after the events take place. The region has made major investments in infrastructure for events like World Expo 2020 in Dubai. The six month long Exhibition will be the main driver of the hospitality industry in UAE, which is valued at 23 billion dollars according to the report. However, in Dubai the hotel room supply and demand could be balanced after Expo 2020.

Other challenge faced by the GCC region is competing with newer projects and attracting skilled labor force.

Sanjay Bhatia, also said that, the growth of the sector will be driven by supportive policy initiatives undertaken by GCC governments to enhance infrastructure; there by positively impacting the continued investor appetite for the region and tourism.

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