Gulf travel sector will adapt to create opportunity

wyndhamhotels.com

Judging by most metrics, 2022 was a busy year for the travel and hospitality sector, with Covid firmly in the rear view mirror for the Middle East.

From January to July the region saw an almost four-fold year-on-year increase in international arrivals compared to the same period in the previous year. What’s truly impressive is that during July these arrivals exceeded pre-pandemic levels by three percent. 

These trends have been mirrored in our own experiences at Wyndham, with the buoyant market enabling us to expand our room offering by four percent during Q3.  

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After the challenging times faced by the industry over the past few years, the last 12 months was a more fruitful period for the sector. However, if we are to build upon this robust foundation and maximise our returns this year, we cannot afford to rest on our laurels. Rather, we must respond to emerging trends. 

Since the reasons for which people travel are as diverse as the places they come from, it is clear that travellers want more choice.

In recent years, the region has seen an uptick in visitors arriving for major international events: the World Cup 2022 tournament in Qatar, The Abu Dhabi Grand Prix 2022 and Dubai’s Expo 2020 have all brought large crowds to the region’s travel and hospitality sector.

Outside of these large-scale events we are also experiencing a more diverse travel demographic.

We have the traditional holidaymaker, with requirements ranging from budget-friendly city centre accommodation to luxurious beachfront residences, but we also have more and more people combining work and pleasure as part of their lifestyle.

The pandemic sparked a rise in digital nomads, combining remote working with a leisure stay or vacation. They need a bespoke offering to match the hybrid nature of their stay, for example access to a guestroom to work for at least six hours.

Responding to emerging travel trends to meet the needs of a diverse market is one way to maximise success and boost sector resilience for the coming year. However, when we look at the financial forecast for this year, many challenges lie ahead.

GDP growth in the UAE is set to slow to 2.7 percent from 5.8 percent according to an ICAEW report and central banks across the world are increasing interest rates in response to rising inflation.

The most immediate effect during a financial squeeze is the reduction in non-essential spending. Understandably, this raises alarm bells for our sector, as reduced levels of tourism are a common side effect of economic insecurity. 

Remaining resilient leading up to this period of uncertainty is key. McKinsey and Co show there are three key steps to this: response, foresight and adaptation. We already have the foresight to know what is to come. What matters now is that we adapt our business models in response to the data we have available. 

For all the uncertainty that 2023 may bring, I think that the industry can move forward on a positive note, secure in the knowledge that we weathered the storm brought about by Covid-19, particularly in the UAE where the government’s innovative and adaptive vision has helped propel the country into the top 10 global tourism destinations. 

The leadership has robust plans for 2023 such as the recently launched UAE Tourism Strategy 2031 and an impressive financial budget of AED205 billion that will ensure high economic stability and prosperous growth of all business sectors. 

If the past year is anything to go by, I am optimistic that 2023 holds abundant opportunities for us as a region. 

Dimitris Manikis is EMEA president of Wyndham Hotels & Resorts