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GIOHIS 2021 crucial for GCC hotel sector engagement on key ahead challenges

Hotel Industry needs to prepare for new ‘headwinds’ as it recovers from Covid, warns industry expert

Leaders are urged to prepare for intensified competition, shortage of labor, new regulations, rising energy prices The sector will require more efficient working practices, and additional investment in automation The cost of guest acquisition remains a big issue for owners

The next 12 months will be a testing time for the GCC hotel industry, with owners and operators facing challenges on multiple fronts, according to Simon Allison, organizer of this year’s Gulf and Indian Ocean Hotel Investors’ Summit (www.GIOHIS.com), which takes place from 14-16 November at the Al Hamra Convention Centre and Waldorf Astoria, Ras Al Khaimah. While the sector will inevitably be focused on recovering its position after the challenges of Covid-19, its leaders are urged to prepare for issues such as intensified competition, a shortage of labor, new regulatory requirements, rising energy prices, and the need for investment in technology.

Allison, who is also CEO of HOFTEL, a network of hospitality property investors, believes the core GCC tourism markets are well placed for a rapid resurgence, but warns that owners and operators that fail to plan for these potential obstacles will be hit hard. GIOHIS 2021, which is being hosted by the Ras Al Khaimah Tourism Development Authority, will bring together leaders from across the hospitality sector to share knowledge and ideas about the challenges and opportunities they face in forging a path towards sustainable growth. 

“Covid-19 represents the greatest challenge that our industry has ever had to face”, commented Raki Phillips, CEO of Ras Al Khaimah Tourism Development Authority. “Ras Al Khaimah is a case study in effective recovery management with a number of initiatives including being the first safe city worldwide as accredited by Bureau Veritas and WTTC, launching a financial stimulus package to support our hotels and attractions, as well as providing travelers free return PCR testing.”

Looking in detail at some of the issues which will be discussed at GIOHIS 2021, Simon Allison has urged hotel owners to focus initially on not letting costs escalate to 2019 levels, thereby positioning themselves better for the various headwinds they face. He says: “To keep a lid on costs, the sector will require more efficient working practices, and potentially some additional investment in automation. It will mean looking hard at the sales department and asking whether new functions for online marketing have replaced or just supplemented – and added to the cost of – existing ones. The cost of guest acquisition remains a big issue for owners, particularly with the growing dominance of online travel agents, which is driving new ways of reaching customers directly, whether through social media or the big brand loyalty programs. 

“For many owners, it will also mean looking again at their relationships with brand partners.  Over the years, as owners have pegged back base and incentive fees through stronger negotiating, the big global brands have added multiple recharges, often lost in a “system” or “program” charge but effectively charging back a vast array of management functions to owners who might once have thought they were covered by the management fee.  This can amount to millions of dirhams per hotel, per year. Some owners are setting up their own management companies or hiring white label operators to cut these costs and, to their credit, many of the global majors are increasingly willing to convert their management contracts to franchises.”

While the whole world has learned lessons from the pandemic and will be embarking on a program of recovery, Allison recommends a cautious approach for the hospitality sector.

“The hospitality sector is generally imbued with optimism and, although it has faced multiple ‘black swan’ threats ranging from war and terrorism to economic recessions, or natural disasters, it has a tendency to look forward not back.  However, with deals, and even property values, surging again around the world, it is almost as though COVID had never occurred.  That is perhaps dangerous.  Are hotels prepared for a new pandemic in terms of their insurance, their lender relations, their safety protocols, their physical design, and their employee plans?  Or have they just assumed it will never happen again?  At this stage, I fear the latter.”

According to Allison, the UAE has set a good example for the industry by restoring traveler confidence with its rapid vaccination program and compulsory masks, combined with largely open borders.  He points out that this strategy has been incredibly successful, and while some markets remain in recovery mode, others such as Ras Al Khaimah and upscale beach areas in the UAE, are actually trading ahead of pre-pandemic levels.

Simon adds: “The challenge will be to maintain momentum once the rest of the world opens up to tourists, as Europe and South East Asia are starting to do. The UAE’s fundamental strengths – a location mid-way between Europe and Asia, great airlines, far-sighted infrastructure projects, year-round sunshine, and plenty of ways to have fun – will not go away.

“Of course, Expo and the World Cup in 2022 will be added attractions and help result in some spill-over business, but it is in the long-term that the UAE can show its strength.  Discussions about the changing weekend will bring it into line with its main tourism markets; the potential arrival of gaming would be a big boost to global arrivals.  Moreover, the proposed high-speed train link, though initially for freight, may eventually make multi-center holidays or day trips within the UAE a far easier proposition, allowing visitors to experience attractions from Jebel Jais to Saadiyat in a day.”

The annual GIOHIS summit – now in its fifth year – provides support and guidance to delegates via a transparent and compact industry forum, with debate about all aspects of the industry, as well as discussion about innovations and best practices.

Key focus areas for GIOHIS 2021 include:

Key speakers include: Alison Grinnell, CEO, RAK Hospitality Holding LLC; Abdullah Abdooli, CEO, Marjan Properties; Raki Phillips, CEO RAK Tourism Development Authority; Dillip Rajakarier, CEO, Minor Hotel Group; Rami Moukarzel, Head of Hospitality Development and Strategy, Louvre Hotels Group; Olivier Harnisch, Member of the Board of Directors, Gulf Hotels Group; Naim Maddad, CEO, Gates Hospitality and Dimitris Manikis, President EMEA, Wyndham Hotels and Resorts.

Tickets are available at https://giohis.com/registration/