Complex Made Simple

There’s no shortage of rooms in the hotel business, but where is the staff?

The UAE hospitality sector’s direct contribution to the country’s GDP is at a 14% average increase each year for the last 10 years according to Knight Frank Dubai’s 2018 market report.

At the end of 2017, Dubai’s hotel inventory stood at 107,431 rooms while Saudi Arabia’s inventory stood at 84,500 existing hotel rooms in the country, according to local reports.

However, imagine this: You went to the UAE for a weekend of shopping. You go to your room and call for room service but no one picks up. No problem, you go to the lobby and it’s bustling with tourists but where’s the staff?

The hospitality sector in the Middle East is growing rapidly in certain parts such as the UAE and Saudi Arabia while other regions are strengthening their pace too, but is experiencing a shortage of staff as a result of this growth.


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Staff hiring falling short

This very growth, TRI Consulting director Christopher Hewett says, has created a shortage of employee force as the supply of jobs is tilting the scale more than there are takers.

“It’s hard to generalize, however, this appears to be the case in individual markets in the region, particularly in the GCC where the hospitality sector has been booming,” Hewett points out.

“Markets such as Saudi Arabia and UAE are experiencing a significant shortage in supply of highly skilled and qualified staff due to exponential growth in supply there.”

The shortage of staff might have something to do with the high turnover rate as well.

49% expressed they would leave the Middle East if they had the opportunity to move, while 32% expressed that they were keen to move to the UAE, said Hawett said.

Are there more candidates joining the hospitality sector?

Gap fillers

Currently, the gap, and the number of students studying to potentially fill that gap are both unknown.

Considering that Construction in the Middle East is also up 36%, compared to the same period last year in April 2017; this is one sector that is growing at a fast pace and is always looking for staff.

It could be you.

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More rooms to come?

Whether foolish or smart, Hospitality construction is booming, hoping you would join their business.

There are 386 properties currently in construction according to a report by STR, a hotel insights firm, totaling to 114,456 rooms; 115 of which properties are in the final planning stage with 28,044 rooms, and 177 properties still in the planning phase, with 47,797 rooms.

“Out of the total rooms in construction, Dubai takes up the biggest chunk with 41,846 rooms making up 41% of the existing supply,” the report stated.

Maybe the Emirate is where you need to be.

But hang on.

“In Saudi Arabia, Makkah leads with 25,619 rooms in the pipeline (just over 71% of the existing supply), Riyadh has 6,244 rooms in construction and Jeddah is adding 3,952 rooms to its existing supply,” the report added.

Ok, so your choices are widening.

Somebody needs to find a place for tourists

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Tourism booming

Dubai is gearing up to receive more than 25 million tourists during Expo 2020, Colliers International forecasted a five-year compound annual growth rate (CAGR) for hotel supply, which is expected to increase by 10% in the UAE, 13.5% in Saudi Arabia, 12% in Oman, 5% in Bahrain and 3.5% in Kuwait.

For hotel occupancy rates, the five-year forecasted CAGR is 3 percentage points (pp) in the UAE, 7 pp in Saudi Arabia, 4 pp in Oman, 4 pp in Bahrain and just shy under 4 pp in Kuwait.

According to the World Travel and Tourism Organization, travel and tourism investment in the GCC in 2017 was $34b billion, or 9% of total investment.

It should rise by 5.5% in 2018, and rise by an approximate 7% per annum over the next 10 years to $68.5 billion in 2028, which is just over 12% of the total, as per the report’s insights.

The excess hotel supply in the region naturally fuels more jobs in the hospitality sector, making it one of the fastest growing sectors in the Middle East.

All things considered, the hospitality sector has no shortage of ambition. With a motivated hospitality workforce ready to jump ships to join, this sector is likely to flourish.