How long can Mid East tourism growth be sustained?

The Middle East is set to achieve the highest growth rate of international tourist arrivals of any world region over the next 15 years, according to the latest edition of the HotelBenchmark Middle East Performance Review, The sky’s the limit, published last month.

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By  Sarah Campbell Published  August 20, 2006

How long can Mid East tourism growth be sustained?|~||~||~|The Middle East is set to achieve the highest growth rate of international tourist arrivals of any world region over the next 15 years, according to the latest edition of the HotelBenchmark Middle East Performance Review, The sky’s the limit, published last month. Travel and Tourism is expected to generate around US $148 billion during 2006. During 2005, the World Tourism Organisation (UNWTO) estimates that the Middle East will attract 38 million international arrivals, taking a 4.8% share of the global market. Future prospects look good, and the UNWTO expects the Middle East to witness an average annual growth rage of 6.7% - the highest in the world – leading to around 68.5 million international arrivals by 2020. Hotel occupancy and rate growth has mirrored this astronomical climb, but now is the time to question the sustainability of this growth. Dubai remains in pole position, and, according to HotelBenchmark is reported to be “the fastest growing place on earth”. However, while average room rates soared up 18.6% to hit $286 – amongst the highest room rates in the world – occupancy dipped to 87%. This may be well above industry average, but could also point to the beginning of a gradual decline that will see the hotel market leveling out at a more competitive average a few years down the road, especially as the number of headline-grabbing super hotel developments start to come online from 2008. Dubai is just one success story. Similar tales of extraordinary growth are also being played out by Qatar, Abu Dhabi and Bahrain, and all markets need to look ahead to the potential pitfalls of flooding their markets with excessive inventory in the years to come. However, one question that remains unanswered is the demand for trained staff to fill all the new hotels waiting to come online. Human resources, training and recruitment now need to be the primary focus of any hotelier with a long-term goal. Whether or not the traditional Indian workforces currently employed across the region will choose to return to their own booming hotel sector is still not certain, and hotel managers in the region need to be prepared with a contingency plan, should this valuable pool of hotel staff suddenly dry up.||**||

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