Could the Middle East hotel bubble burst by 2010?
The Great Hotels Organisation – http://www.ghorg.com – exhibiting at ATM in May for the first time, has announced it believes the current Middle Eastern hotel market’s bubble will burst by 2010.
Currently the Middle Eastern hotel market is enjoying a period of sustained growth due to the fact that demand for rooms outstrips supply.
During 2007, the Middle East hotel industry was the third fastest growing in the world, with occupancy levels increasing by 5% to an average of 71.6%.
Dubai continues to achieve the highest absolute occupancy at 84.2%, yet Oman has emerged as having the region’s strongest growing market.
Oman’s growth has been attributed to the current imbalance between demand and supply, yet with room capacity set to double by 2012, this bubble could burst as part of a wider trend also to be seen across the region as a whole.*
According to GHO, this burst is due to occur as a result of the region’s over-reliance on Gulf Cooperation Council (GCC) guests.
This is possible due to the high demand for a limited number of rooms, meaning occupancy can be filled by these local markets alone.
With hotel construction in the region being one of the highest in the world, however, the increased number of rooms available will cause intense competition for these regional guests, even if visitor numbers continue to increase.
Adding to the situation are the high inflation levels that exist in areas like Dubai. These steady rises risk forcing industry and commerce to host their events outside the Middle Eastern region, in areas like the Far East, where costs are much lower.
In the past, Singapore went through a similar market trend which led to a slump in the hotel market, resulting in GHO’s similar predictions for Dubai in the future.
This negative outlook for the Middle Eastern market, however, does not have to become a reality. GHO is confident that if hotel managers in the region begin planning for the future now, a much more positive outcome can be achieved.
Debora Maloney, Director of Business Development, GHO, commented: “It is possible for hotels to protect themselves against any potential downturn in profits but it is important that they act now.”
“The key will be for hotels to act early to open themselves up to the international marketplace, so that any lost guests from the GCC countries can be replaced by international guests to ensure continued growth.”
“This includes placing more emphasis on international MICE, corporate and leisure business, making it ever more important to become associated with an international hotel alliance such as Great Hotels Organisation.”
“Joining an established alliance will enable independent hotels to draw on existing expertise to build their international business without the need for them to struggle on their own.â€
For further information on Great Hotels Organisation, visit them at stand TT340 at the Arabian Travel Market, 6-9 May 2008 or to pre-arrange a meeting and further details, please contact:Debora Maloney on +44 (0)20 7383 2335 or [email protected]
A Report by The Mole
John Alwyn-Jones
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Airbnb eyes a loyalty program but details remain under wraps
Airlines suspend Madagascar services following unrest and army revolt
Qatar Airways offers flexible payment options for European travellers
Air Mauritius reduces frequencies to Europe and Asia for the holiday season
Major rail disruptions around and in Berlin until early 2026